[Comprehensive INNEWS report] On September 4, the National Bank of Cambodia announced that it would sell US$50 million in order to intervene in the Cambodian riel’s exchange rate against the US dollar in the foreign exchange market.
The announcement shows that four public auctions of US dollars will be held from September 6 to 15, 2023, and the National Bank of Cambodia plans to auction US$50 million. The auction will be open to participation by all licensed banks, microfinance institutions and money changers. The National Bank of Cambodia said the U.S. dollar has appreciated sharply recently against other currencies, including the Cambodian riel. This increase is mainly affected by seasonal factors and the appreciation pressure of the US dollar in the international market.
As seasonal factors change, demand for Cambodian riel slows during the agricultural growing and off-season periods. In addition, after the Federal Reserve continued to raise interest rates, the U.S. dollar continued to appreciate against other world currencies as a whole, attracting capital flows to the United States, thus boosting demand for the U.S. dollar in the international market.
It is understood that the National Bank of Cambodia continues to adopt a controlled floating exchange rate system, allowing the riel exchange rate to fluctuate moderately. In response, the National Bank of Cambodia is ready to take necessary measures to intervene in the foreign exchange market to maintain the stability of the riel value and maintain the purchasing power of the Cambodian people’s income. According to the National Bank of Cambodia, the official exchange rate on September 5, 2023 was 4,158 riel to 1 U.S. dollar. As of the first half of 2023, Cambodia’s international reserves were approximately US$18.4 billion, an increase of 3.2% from the end of December 2022, equivalent to the import volume of goods and services in the next seven months.
