By JEREMY MULLINS
THE PHNOMPENHPOST
Photo by: AFP A Cambodian worker sews at a factory in Sihanouk province. Experts think the industry may benefit from a weakened dollar.
Cambodia’s garment industry stands to benefit from the declining value of the United States dollar, according to Jayant Menon, principal economist at the Asian Development Bank’s Office of Regional Economic Integration.
The riel has strengthened against the dollar since an announcement last Wednesday that America’s Federal Reserve would buy up Treasury debt at a rate of around US$75 billion per month to the end of June, bolstering the struggling United States economy by $600 billion.
National Bank of Cambodia statistics show the riel strengthened in value by about two percent from Monday to Friday last week, trading at 4,134 riel against the greenback at the end of the working week.
Money changers near Phnom Penh’s Central Market on Sunday were buying one US dollar for 4,060 riel in some instances.
Jayant Menon said the Cambodian garment industry in particular could benefit from the strengthening riel.
“Since the US dollar is Cambodia’s de facto currency, this implies that for exports, both domestic costs and international receipts are determined in US dollars,” he said.
For the Kingdom’s competitors, many received payments in dollars, but paid all domestic costs in the local currencies – which would likely strengthen as the greenback lost value, he said….read the full story in tomorrow’s Phnom Penh Post or see the updated story online from 3PM UTC/GMT +7 hours.
The riel has strengthened against the dollar since an announcement last Wednesday that America’s Federal Reserve would buy up Treasury debt at a rate of around US$75 billion per month to the end of June, bolstering the struggling United States economy by $600 billion.
National Bank of Cambodia statistics show the riel strengthened in value by about two percent from Monday to Friday last week, trading at 4,134 riel against the greenback at the end of the working week.
Money changers near Phnom Penh’s Central Market on Sunday were buying one US dollar for 4,060 riel in some instances.
Jayant Menon said the Cambodian garment industry in particular could benefit from the strengthening riel.
“Since the US dollar is Cambodia’s de facto currency, this implies that for exports, both domestic costs and international receipts are determined in US dollars,” he said.
For the Kingdom’s competitors, many received payments in dollars, but paid all domestic costs in the local currencies – which would likely strengthen as the greenback lost value, he said….read the full story in tomorrow’s Phnom Penh Post or see the updated story online from 3PM UTC/GMT +7 hours.
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