Mr. Mike Smith speaking in a conference
Last Updated on 21 February 2013
The Phnom Penh Post
By Daniel de Carteret and May Kunmakara
ANZ chief executive Mike Smith says Cambodia should decouple the riel
from the US dollar to a stand-alone currency and align itself to the
Chinese renminbi (RMB), given the shift in global trade flows.
At the Cambodia Outlook Conference in Phnom Penh yesterday, Smith
said: “I believe you have to think very seriously about linking your
currency to somebody else’s currency, because you don’t control the
printing press and that will always give you trouble in times of either
tight or excessive liquidity, as we have now.
“The issue for Cambodia is to work through what it needs to do over
the medium and long term, but be aware that with the trade and
investment flows being more China- and Asia-biased, the currency to
align to in the future is probably more likely to be the RMB than the US
dollar.”
But Business Research Institute for Cambodia chief executive Hiroshi
Suzuki said although Chinese companies had already begun exporting in
RMB with incentives from the Chinese government, he expected the US
dollar to remain the dominant currency in the short term.
“The use of the dollar is dominant in trade between Cambodia and
other countries,” Suzuki said.“Transacting in RMB is a disadvantage for
Cambodian companies because they face exchange-rate fluctuations.”
Suzuki said outside of the US dollar, the riel should not be pegged to any single currency.
“If Cambodia has success in de-dollarisation to some extent, the riel
should be pegged to the basket of major currencies or international
organisation currency,” he said, adding that the riel should not be
linked or pegged to any single foreign currency, but the US dollar.
“During the highly dollarised period in Cambodia, the stable exchange
rate between riel and the dollar is very important for stable
macro-economic management of Cambodia.”
To contact the reporters on this story: Daniel de Carteret at
daniel.decarteret@phnompenhpost.com
May Kunmakara at
kunmakara.may@phnompenhpost.com
2 comments:
preaching the logics of the economy to the Hun Sen's govt is like asking them to give up on their money laundering and what is the currency basis??? USD. The CPP have their USD laundered money stashed in the USA not in China, Mr Smith - obviously you know nothing about Cambodia other than being paid big in Australia
This is a good advice. Smith is a banking expert and CEO of one of Australia's biggest banks. Cambodia should give up the use of U.S dollar and make our national currency- the riel- the main currency just like Thailand making the Baht and Vietnam making the Dong their main and only currencies in circulation in their countries.
When you are using foreign currency, you are at the mercy of that country's economy- if it collapses, your economy would also collapse because you used its currency.
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