via Khmer NZ News Media
Wednesday, 09 June 2010 15:00 Nguon Sovan
Today’s sale follows $4 million in dollar auctions last month that have yet to raise the value of riel markedly against the United States currency.
THE National Bank of Cambodia’s (NBC) third attempt to stabilise the declining riel is under way as the second of three US$1 million currency buys takes place today.
A total of $3 million was to be auctioned off to purchase riel in separate lots Monday, Wednesday and Friday of this week, an NBC statement signed by deputy director general Nguon Sokha released Monday said.
This is the third intervention by the NBC to stabilise the riel after its first package of $4 million auctioned late last month and the second $3 million last week failed to stop the riel’s continued decline.
Bidding for Monday’s $1 million lot saw nine money changers participate. The winning bid of 4,232 riels per dollar was won by a money changer based in Phnom Penh’s Olympic Market, said a central bank official requesting anonymity.
The depreciation of the domestic currency is not unique to Cambodia, as the US dollar has strengthened against many foreign currencies, including the euro, Cambodia Institute for Development Study president Kang Chandararot said Tuesday.
“It’s good the NBC releases US currency to appreciate the riel,” he said. “The riel will likely rise as euro currency recovers in value.”
He estimated there is $500 million worth of riels in circulation in Cambodia, and said the currency’s decline is also due to a drop in trade and investments denominated in dollars.
The riel had depreciated 1.74 percent by Tuesday, to 4,263 per US dollar from 4,190 in mid-April, according to Ministry of Commerce daily statistics.
This week’s three separate $1 million auctions take place at the NBC’s Phnom Penh headquarters on Norodom Boulevard. Commercial banks, licenced money changers and companies are able to bid, according to the NBC’s statement.
The euro has depreciated 15 percent against the US dollar since May, trading at $1.19 Tuesday from $1.40 per euro early last month.
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