National Bank of Cambodia (NBC) is preparing to sign agreements with the State Bank of Vietnam and the Bank of the Lao People's Democratic Republic to promote the use Cambodia’s local currency, riel, in their economic activities.

NBC Deputy Governor Chea Serey, as quoted by Vietnam News Agency correspondent in Phnom Penh, highlighted that this initiative would allow consumers to utilise riel for purchasing products/services in other countries through QR codes linked to their domestic accounts.

Chea said the promotion of cross-border payments using the riel is expected to enhance its circulation.

She noted that the demand for riel has been gradually increasing. Over the years, the circulation of riel in Cambodia has experienced an average annual growth rate of 16.6 per cent, reaching about 14.1 trillion riel (equivalent to US$3.4 billion) in 2022, up from 356 million riel in 1998. However, the rising value of the US dollar has impacted the Cambodian economy.

In addition to facilitating cross-border transactions, the use of riel will be encouraged among tourists visiting Cambodia who wish to pay in their local currencies when engaging with Cambodian merchants. However, Cambodia’s top economist did not specify when new agreements will be reached.

It is worth noting that ASEAN-5, consisting of Indonesia, Malaysia, Philippines, Thailand and Singapore, signed an agreement last year to establish cross-border digital payment systems using QR codes. Currently, Malaysia, Indonesia, and Thailand are already connected, and Singapore, Viet Nam and the Philippines are expected to be connected by the end of this year.

Moreover, individual bilateral agreements have been formed, such as Thailand's QR links with Cambodia, Indonesia, Malaysia and Viet Nam. — VNS