NBC plans to boost riel purchases to $48 million

via Khmer NZ

Monday, 30 August 2010 15:00 Nguon Sovan

THE National Bank of Cambodia plans to purchase a further US$5 million worth of riels to shore up the currency, bringing total purchases to $48 million for the year.

Cambodia’s currency is down nearly 2 percent against the greenback since mid-April, but has held steady since the central bank began pursuing a more interventionist currency policy in May, according to industry observers.

“With the National Bank of Cambodia’s currency buys, we see the riel currency has remained at a constant level since May – it has not depreciated since then,” the owner of Phnom Penh’s Ly Hour exchange, Sieng Lim, said yesterday.

The riel had depreciated 1.95 percent by yesterday to 4,272 riels per dollar from 4,190 riels per dollar in mid-April, according to Ly Hour data.

The depreciation drove the NBC to purchase riels in a bid to create artificial demand for the notes and raise its value against the greenback.

NBC director general Tal Nay Im said the riel generally appreciates starting October.

“The riel depreciates seasonally. We do not see anything abnormal,” she said.

“Every year, it begins to return to normal levels of between 4,100 and 4,200 per US dollar in October, as the harvest season approaches.”

Last year's total for riel purchased by the NBC was $54 million. Tal Nay Im has suggested there may be further purchases of riel this year to shore up its value.

“We expect to sell a similar amount of US dollars this year to appreciate the riel as we did in 2009,” she said.

The next $5 million will be auctioned off in five separate $1 million lots from September 1 to 10, at the central bank’s headquarters on Phnom Penh’s Norodom Boulevard, according to an announcement released on Friday and signed by the NBC director general.