Push for border use of local currencies
BUSINESS leaders from the Lower Mekong region are urging their respective governments to use local currencies for trading in border regions instead of the US dollar, arguing that this would facilitate business transactions and reduce exchange costs, a Thai newspaper reported yesterday.
Sanan Angubolkul, president of the Thailand-Vietnam Business Council, said the use of local currencies for trade in border areas would benefit business operators in a number of ways, shortening the trade process while reducing the risks and costs of volatile exchange rates against the US dollar. This would result in more trade, he told the Bangkok Post.
He added that business leaders in Thailand and the Cambodia, L aos, Viet na m a nd Myanmar (CMLV) region were planning to propose the local currency plan to their government s y e s t e r d a y d u r i n g t he 7t h Aye y awady- Chao Ph raya-Mekong Econom ic Cooperation Strategy Summit (ACMECS-7) in Hanoi.
However, a Cambodian trade of f i c i a l who j oi ned t he ACMECS-7 meeting yesterday could not confirm that the proposal had been discussed.
“I did not hear anything regarding this plan,” said Sim Sokheng, director-general of international trade at the Ministry of Commerce.
Economist Chan Sophal said the acceptance of local currencies along border regions would facilitate both business and tourism. He said Cambodian traders were already accepting Thai, Vietnamese and Lao currencies in border areas, but the riel was not readily accepted outside the country.
“Our count r y i s f ree a nd f lex ible in using foreign currencies, and we already accept various currencies near our borders,” he said. “But whether we ca n use our riel ban- k notes on t hei r side of t he border is a question.”
He said the use of riel currency in neighbouring countries would involve the “leaki ng of money” i nto t hese cou nt r ies, which ca r r ies a sl ig ht monetar y r isk to t he National Bank of Cambodia, but when spent the currency’s value would be recovered as products and ser vices.