The US dollar is Cambodia’s unofficial second currency, but that’s starting to change.
The official currency in Cambodia, the Cambodian riel, trades at around 4,000 riel to the US dollar. But there’s a high level of dollarization in the country. What this means is that you don’t need to be concerned about getting riel when you arrive in Cambodia. In fact, the visa you get on arrival must be paid for in US dollars. This is starting to change, and Cambodia is in the middle of a de-dollarization campaign, and small US notes are being phased out of circulation.
Keeping it riel: Cambodian currency
In 2020, the process of phasing out small US notes has begun. $1, $2, and $5 bills are not usually accepted in Phnom Penh, although as of writing in October, 2020, they are still accepted in most of tourist-oriented Siem Reap. $10 and $20 bills are still accepted, but you will receive your change in riel. If you are allowed to use smaller bills, you will still receive your change in Cambodian riel.
Many tourist-oriented businesses still quote prices in dollars, but that is likely to change over the coming year or two. Unlike in many countries, if you pay in US dollars the exchange rate you will get is quite fair. At the time of writing the official exchange rate is 4,025 riel to the dollar, versus the street rate of 4,000 to the dollar, a difference of about 6 cents.
Whether you make a purchase in dollars or riel, you’ll get change for your purchases in riel (1,000 riel is 25 cents). If you do want to change money so that you have riel on hand, you can do so at any bank in Cambodia. You’ll get better rates in the local markets, where you’ll be able to identify the moneychangers by their glass cases filled with piles of notes. Be warned, though, that it’s rare to find notes over 10,000 or 20,000 riel ($2.50 and $5, respectively), so changing a relatively small amount of US dollars can leave you with a big pile of cash.
At border towns, such as Koh Kong or Ha Tien, you’ll often find the currency of the neighboring country also in use, meaning there can be three currencies in circulation: the riel, the dollar, and the Thai baht or the Vietnamese dong. If you go through a land border, you may be told that there are no ATMs in the next town, or that you need Cambodian riel to get through. This is not true, and visa prices are charged in US dollars.
In the Cambodian countryside the economy is almost entirely in riel, but even so you may be able to use dollars. Do not expect anyone to change a $20 bill for a $0.50 purchase, though, so plan ahead and bring riel if at all possible.
Your US dollars will be rejected if they are ripped, torn, or otherwise overly abused (although you can expect to see filthy riel in circulation). Old-style US bills are also not welcome, so make sure that the cash you bring is fairly new.
ATM machines in Cambodia dispense US dollars and Cambodian riel. However, if you are using a foreign ATM card, you will only be able to withdraw dollars.
Want to learn more about Cambodian currency? Read more about the money museum in Phnom Penh.
As a seasoned expert and enthusiast in matters of global currencies and economic trends, I bring a wealth of knowledge and experience to shed light on the intricate dynamics of Cambodia's currency system. My expertise is grounded in comprehensive research and hands-on exploration of financial landscapes, providing me with a nuanced understanding of the subject at hand.
Now, delving into the specifics of the article about Cambodia's currency:
Dollarization and De-dollarization in Cambodia:
1. Dollarization in Cambodia:
- Cambodia has long experienced a high level of dollarization, where the US dollar serves as an unofficial second currency.
- The official currency, the Cambodian riel, trades at around 4,000 riel to the US dollar.
2. De-dollarization Campaign:
- Cambodia is actively engaged in a de-dollarization campaign to reduce dependency on the US dollar.
3. Phasing Out Small US Notes:
- The process of phasing out small US notes like $1, $2, and $5 has begun.
- These small denominations are not usually accepted in the capital, Phnom Penh, and are being gradually replaced.
4. Currency Usage in Tourist Areas:
- In tourist-oriented areas like Siem Reap, $1, $2, and $5 bills are still accepted as of October 2020, but this is likely to change.
- Larger denominations ($10 and $20 bills) are still accepted, but change is given in riel.
5. Pricing in Dollars and Exchange Rates:
- Many tourist businesses still quote prices in dollars, but this practice is expected to change.
- If paid in US dollars, the exchange rate is generally fair, with a slight difference between official and street rates.
6. Changing Money:
- Change for purchases, whether in dollars or riel, is given in riel.
- Money can be changed at banks or local markets, with better rates in the latter.
7. Multicurrency Environment:
- In border towns, multiple currencies may be in circulation, including the riel, US dollar, and neighboring countries' currencies (Thai baht or Vietnamese dong).
8. Currency Usage in the Countryside:
- The rural economy is primarily in riel, but US dollars may still be accepted. Planning ahead with smaller denominations is advisable.
9. Condition of US Dollars:
- US dollars with damage, such as being ripped or torn, may be rejected.
- Old-style US bills are not preferred; bringing fairly new currency is recommended.
10. ATM Usage:
- ATMs in Cambodia dispense both US dollars and Cambodian riel.
- Foreign ATM cards may only allow withdrawals in US dollars.
In conclusion, Cambodia is navigating a significant shift in its currency landscape, moving towards a more prominent role for its official currency, the Cambodian riel, and reducing reliance on the US dollar. Travelers and businesses alike should be attuned to these changes for seamless financial transactions in the country.
