AEON Mall Stops $1-10 Change

Phnom Penh: From August 1, 2020 on, Aeon Mall has announced a suspension returning $1, $5 and $10 bills in change. The announcement was made on July 30 , 2020, but states that Aeon Mall will continue to accept dollar bills from customers shopping at the mall until further notice .

Note that on 28 May 2020 , the Technical Director National Bank led a meeting with representatives of banks and financial institutions on the challenges of small denominations of $US and the consequences for banking and financial institutions and the National Bank of Cambodia in managing these types of banknotes.

The meeting discussed and agreed on some of the following challenges:

From a policy perspective: In a situation where the world is facing a global health crisis and is entering an economic crisis, strengthening independence in conducting monetary policy will contribute to more effective economic growth. In this direction, Cambodia needs to promote the use of the riel more widely , starting with spending on smaller transactions. Therefore, allowing the circulation of small US dollar bills is an obstacle to promoting the use of the riel.

In the last six months, the riel as well as the local currency has depreciated significantly against the US dollar. For countries in the region, the value of their currencies has fallen, mainly due to declining exports and outflows of capital. In Cambodia, the depreciation of the riel was due to declining demand for the riel (mainly due to declining domestic economic activity and declining demand for the riel to pay taxes, etc.) . The depreciation of the riel against the US dollar has had a negative effect on farmers and those earning money in riel. Therefore, to stimulate the demand for the use of the riel in the economy, especially for small transactions, the use of small US dollars should be replaced by the riel.

Technical view: The National Bank is the only institution entitled to transport currency . Although not its role, the National Bank of Cambodia has in the past facilitated the shipment of new banknotes from the US Federal Reserve to Cambodia. However, older and damaged US dollar bills are difficult to control the quality, since the carrying out of these bills are high labor costs and budgets, while local banknotes can be withdrawn, destroyed and replaced with new printed banknotes.

The National Bank gives until the 31 August 2020, for the Banking and Financial Institutions to bring bills of US $ 1-$ 5 for free shipping abroad. After August 31, 2020, National Bank will transfer the costs shipped abroad on smaller US dollar bills and  to the financial institution. There is no fee for receiving US $ 10 or more.

The National Bank of Cambodia (NBC) will continue to consult with banking and financial institutions to reach an appropriate time to suspend the receipt of small US dollars from banking and financial institutions.

Discussions at the meeting were also attended by representatives of a number of retail sectors. The National Bank of Cambodia would also like to emphasize that the implementation of the above measures does not imply a ban on the circulation of these small denomination banknotes on the market. NKD

Leave a Reply

Your email address will not be published. Required fields are marked *