Illustrative photo. (Source: dreamstime.com)Phnom Penh (VNA) – The Cambodia Rice Federation (CRF) and the National Bank ofCambodia (NBC) discussed ways to use the riel and the Chinese yuan in rice exports between China and Cambodia,Khmer Times newspaper reportedon June 18.
The CRF also discussedwith the representative of the NBC to promote the local currency for domesticconsumption and transactions, Khmer Times quoted CRF vice president Chan Sokheang as saying.
He said allthe transactions with the rice millers and farmers will use riel.
All riceexporters may soon have an alternative choice of payment either in US dollarsor yuan. However, Sokheang said there were barriers to using the yuan forcross-border transactions previously, therefore, the discussions with the NBCwere to resolve previous issues.
If Cambodiaand China can trade with the riel and the yuan, the two countries will benefit from theexchange rate, Sokheang noted.
At present,exports of milled rice to China have been conducted in US dollars, but when thebuyers sold the products in the Chinese market they get Chinese yuan. Then theyexchange the Chinese yuan to US dollars to pay the Cambodia sides. Therefore,there is a loss on the exchange rate, he explained.
Sokheang saidthat for the first five months of the year Cambodia exported milled rice toChina at a total value of 71 million USD. Therefore, the use of yuan and rielfor the cross-border transactions will be beneficial for both traders – Cambodiaand China – and they also enable the expansion of Cambodian milled rice to theChinese market.
LongVibunrith, deputy director of the NBC’s Exchange Management Department, saidboth sides agreed on the proposal to set up a memorandum of understanding (MoU)to begin transactions in yuan and riel at the meeting attended by the ChineseCentral Bank, the NBC and commercial banks.
Vibunrith saidthat there might be an MoU signing ceremony during the Asia-Europe Summit inNovember, when the leaders of Cambodia and China meet each other./.
VNA
