||Until 1953, Cambodia was a colony of France. Its monetary policy was once in the hands of France. A monetary union created in 1950 stood for the equivalent of a central bank of Indochina (a region containing Vietnam, Cambodia, and Laos).
In the Sihanouk Period (1953-1970), Cambodia began to issue its own currency. This currency, Riel, was pegged to gold, and backed by 13 million non-tradable French francs and 4 million in France's own treasury. By 1969, Cambodia was mired in the Vietnam War and a subsequent hyperinflation. The Riel was devalued and the exchange rates for tourism and imports were abolished.
Since the establishment of the Khmer Republic in 1970, the currency was known as Khmer Riel. During the period of Khmer Republic (1970-1975), the Vietnam War further paralyzed the economy. The species speculations and shortages in basic commodities resulted in radical inflation and currency devaluation. U.S. aid-financed goods flowed into Cambodia. In 1970, a semiofficial Commercial Import Rate was accepted for U.S. aid-financed goods. The exchange rate regime also experienced several changes within this short period. In 1971, a Flexible Floating Rate was established for all transactions except specified government transfers. In 1974, a three-tier exchange rates structure was introduced.
The following Democratic Kampuchea period(1975-1978) was dominated by the authority's aim to rusticate the economy. Economic activity was entirely managed by the state apparatus. The currency was banned. Banks and markets were closed. Barter was a unique feature of Democratic Kampuchea against the rest of the world. (Ear, 1995)
The post-Democratic Kampuchea Cambodia once used old, the Thai Baht, and the Vietnamese Dong for transaction. A national currency backed by rice was introduced in 1980. The currency was named as Cambodian Riel in 1990. Since then, the exchange rate system comprised two rates: the Official Rate and the Parallel (market) Rate. The National Bank of Cambodia adjusts the Official Rate daily to make it close the Parallel Rate. The Official Rate, which is classified as managed floating by IMF, applies mostly to external transactions by the government and State-owned enterprises. The Parallel Rate is tolerated by the government and actually dominates interbank and most other transactions. (IMF 1997, p.154)
The U.S. Dollar circulates freely and is used for payment. (IMF 1998, p.166)
Sources of reference include:
1. World Currency Yearbook. (WCY)
2. IMF Annual Report on Exchange Arrangement and Exchange Restriction. (IMF)
3. Ear, Sophal (1995): " CAMBODIA'S ECONOMIC DEVELOPMENT AND HISTORY:
A Contribution to the Study of Cambodia's Economy", Undergraduate Economics Honors Thesis, University of California, Berkeley. (Available online at: http://www.csua.berkeley.edu/~sophal/whole.html).
to the exchange rate regime
Riel per U.S. Dollar
|18 August 1969||The Cambodian Riel was devalued from CR35.00 to CR55.5419 per U.S. Dollar. At the same time, the Tourist Rate and the Import Rate resulting from compensation charges were abolished. (WCY 1990-1993, p.410) ||55.542 |
|3 March 1970|| ||0.000 |
|9 October 1970||Cambodia declared herself the Khmer Republic, and the currency became known as the Khmer Riel (KR). (WCY 1990-1993, p.410) || |
|December 1970||A semiofficial Commercial Import Rate of KR83.00 per U.S. Dollar was accepted for U.S. aid-financed goods entering the country. (WCY 1990-1993, p.410) || |
|15 August 1971||Following the floating of U.S. Dollar, the exchange rate relationship of the Riel against the American unit remained unchanged, thus effecting a de facto devaluation. (WCY 1990-1993, p.410) || |
|29 October 1971||The Riel was partially devalued, as a Flexible Floating Rate was established and made applicable to virtually all transactions, with the rate depreciated periodically. The Official Rate of KR55.5419 per U.S. Dollar remained operative via a subsidy payment and was applicable only to specified government transfers. (WCY 1990-1993, p.410) || |
|18 December 1971||With the de jure devaluation of the U.S. Dollar, the Riel was theoretically devalued 7.89% in terms of gold, as Phnom Penh made no changes in the exchange value of its currency against the American unit. (WCY 1990-1993, p.410) || |
|17 January 1972||The Commercial Import Rate was officially reintroduced at a depreciated KR90.00 per U.S. Dollar, with deviations from the Flexible Floating Rate not to exceed 25%. (WCY 1990-1993, p.410)
The rate listed since is the Commercial Import Rate. ||90.000 |
|2 March 1972||The maximum difference permitted between the Commercial Import Rate and the Flexible Floating Rate ws increased from 25% to 30%, with parallel, periodic depreciations of both rates continuing. (WCY 1990-1993, p.410) || |
|13 February 1973||Following the devaluation of the U.S. Dollar, no change was made in the exchange rate structure or the Riel, thus effecting a 10% devaluation of the unit in terms of gold. (WCY 1990-1993, p.410) || |
|27 August 1973||The maximum permissible difference between the Commercial Import Rate and the Flexible Floating Rate was lowered to 20%. (WCY 1990-1993, p.410) || |
|18 October 1973||The margin between the two rates was temporarily set at KR45.00 per U.S. Dollar, and later widened. (WCY 1990-1993, p.410) || |
|18 September 1974||A three-tier exchange rate system was established.
The Flexible Floating Rate became the New Exchange Market Rate and was depreciated from KR420.00 to an intial rate of KR1,100.00 per U.S. Dollar. A fluctuating Free Market Rate was created at KR1,204.00 per Greenback, while the Commercial Import Rate was divided into two categories: the currency was downgraded from KR336.00 to KR915.00 per U.S. Dollar for U.S. aid-financed imports; for approved imports from specified underdeveloped countries a rate of KR1,085.00 per American unit was created.
The Official Rate of KR55.5419 per U.S. Dollar was abolished.
(WCY 1990-1993, p.410)
The rate listed is the Commercial Import Rate for U.S. aid-financed imports. ||915.000 |
|May 1975||All of the currency varieties were subsequently depreciated. At this time, the Khmer Riel ceased to exist, and barter replaced money. (WCY 1990-1993, p.410) ||0.000 |
|1978||It was reported that economic transactions between the government and the cooperatives in the countryside as well as for some foreign trade were based on a unit of account valued at 4.00 Riels per U.S. Dollar. (WCY 1990-1993, p.410) ||4.000 |
|1 April 1980||A national currency was reintroduced. The new Kampuchean Riel (KR) was backed by rice, with 1.00 Riel purchasing 1 kilogram of rice. The Official Rate was eventually set at KR4.00 per U.S. Dollar. (WCY 1990-1993, p.410)
The rate listed since is the Official Rate. ||4.000 |
|1984||An Official Rate of KR7.00 per Greenback surfaced. (WCY 1990-1993, p.410) ||7.000 |
|31 December 1985|| ||7.000 |
|1986||An Official Rate of KR30.00 per Greenback surfaced.
A Remittance Rate of KR75.00 per Greenback was made applicable for conversion of hard currency received from relatives abroad. An Official Rate of KR7.00 per Greenback surfaced. (WCY 1990-1993, p.410) ||30.000 |
|September 1987||The Riel was devalued to KR100.00 per U.S. Dollar and Remittance Rate was abolished. (WCY 1990-1993, p.410) ||100.000 |
|17 October 1988||The Riel was cut 29.6% to KR142.70 per Greenback. (WCY 1990-1993, p.410) ||142.700 |
|31 December 1988||Interbank Rate: 165.00. (WCY 1990-1993, p.413) ||151.530 |
|31 December 1989||Interbank Rate: 265.00. (WCY 1990-1993, p.413) ||218.200 |
|1990||With the country's name changed back to Cambodia early this year, the currency was again called the Cambodian Riel and the unit was to be periodically adjusted by the National Bank of Cambodia to maintain a close relationship to the illegal, but tolerated, Black (Parallel) Market Rate. The Official Rate, which was a controlled rate set daily by the National Bank and periodically devalued, applied mostly to external transactions conducted by the government and State-owned enterprises. An Interbank Rate, defined within specified margins to the Official Rate, actually trades at the Black (Parallel) Market Rates, and governs most other transactions. Foreign exchange dealers are allowed to buy only banknotes and travelers checks and are required by law to transact at the Official Rate. In practice, however, they take place at the Black (Parallel) Market Rate. (WCY 1990-1993, p.411) || |
|1 May 1990||The Riel was devalued 39.4% to CR360.00 per U.S. Dollar. (WCY 1990-1993, p.411) ||360.000 |
|14 August 1990||The Riel was devalued 21.7% to CR460.00 per U.S. Dollar. (WCY 1990-1993, p.411) ||460.000 |
|31 December 1990||Interbank Rate: 700.00. (WCY 1990-1993, p.413) ||606.000 |
|6 July 1991||The Riel was devalued 25% to CR808.00 per U.S. Dollar. (WCY 1990-1993, p.411) ||808.000 |
|9 September 1991||The Riel was devalued 20% to CR1010.00 per U.S. Dollar. It then began to appreciate. (WCY 1990-1993, p.411) ||1,010.000 |
|31 December 1991||Interbank Rate: 895.00. (WCY 1990-1993, p.413) ||525.200 |
|31 March 1992|| ||888.800 |
|30 June 1992|| ||1,010.000 |
|30 September 1992|| ||1,444.300 |
|31 December 1992||Parallel Market Rate: 2330.00. (IMF 1993, p.87) ||2,020.000 |
|1 August 1993||The National Bank began to limit the average spread between the Official Rate and the Black (Parallel) Market Rate to no more than 5% during any two week period. (WCY 1990-1993, p.411) || |
|23 September 1993||The National Bank began regular auctions of foreign exchange. Authorized participants are commercial banks and registered businessmen. Bidders are required to lodge a deposite equal to 10% of their bid and to pay the balance in two working days. (IMF 1994, p.88) || |
|1 December 1993||The spread between the Official Rate and the Black (Parallel) Market Rate was reduced to 3%. (WCY 1990-1993, p.411) || |
|31 December 1993|| ||2,413.900 |
|1 September 1994||The spread between the Official Rate and the Market Rate was narrowed to less than 1%. (IMF 1995, p.87) || |
|31 December 1994||The market rate: 2605. (IMF 1995, p.86) ||2,588.000 |
|25 March 1995||New banknotes were issued, with denominations ranging up to CR100,000. (IMF 1996, p.89) || |
|31 December 1995||The market rate: 2650. (IMF 1996, p.88) ||2,526.000 |