PHNOM PENH: A recent Memorandum of Understanding (MoU) between the National Bank of Cambodia and China's UnionPay has some Cambodians worried that the Chinese Yuan will be widely circulated like the American dollar is currently. They fear this will devalue the Riel as tourists will have less imperative to exchange their foreign currency.
Deputy Governor of the National Bank of Cambodia, Chea Serey, explained that the MoU, which will increase the ease of QR payments for Chinese and Khmer tourists travelling abroad, will not bring the Yuan into use in Cambodia.
She pointed out that most Chinese tourists have bank accounts, which they use in their national currency without using US dollars. The MoU will allow Chinese tourists who come to Cambodia to buy goods using UnionPay QR at Cambodian retailers. To allow this transaction, the buyer’s bank in China will exchange Yuan into Riel before depositing it into the retailer’s account. Therefore, by the time the payment reaches Cambodia, it has already been converted into Riel while back in China, Yuan will be withdrawn from the buyer’s account.
Chea Serey emphasized that electronic payments are convenient for Chinese tourists visiting Cambodia without having to withdraw Yuan at the bank and then physically exchange it for Dollars or Riels.
Cambodian tourists visiting China who shop in China will be able to use the Bakong app for QR payments in China. Cambodian banks will likewise have to convert their payments from Riel to Yuan before they can pay Chinese vendors.
Chea Serey confirmed that Cambodians who do not have a bank account in Riels will not be able to make electronic payments with their phones, however they will still be able to withdraw and spend bank notes as usual.
"This will also encourage Cambodians who do not have a Riel savings to open one so that they benefit from this memorandum, which will ultimately boost local Riel circulation," she said.
She emphasized that the new initiative for transnational payments is meant to promote the Riel, its prestige and its presence via electronic payments on the international stage. She also believes the move will encourage more Chinese tourists to visit Cambodia.
