The Kingdom of Cambodia has an interesting monetary past. The country used a variety of currencies throughout its many years of trade. The currencies varied in their make, size, and shape, ranging from precious metal coins to ceramics. Currently, the South Asian country uses the riel as its official currency. The currency’s name is said to have emerged from the popularly used Mexican real. The real was common during 19th-century trade with Indian, Chinese, and Malay traders.
In medieval times, business was thriving in Cambodia. During the reign of the Khmer empire, businesspeople from Greece, India, Iran, Malaysia, and Rome came to trade in Cambodia. The merchants used coins made of gold, silver, and bronze as their currency. In addition to metallic currency, the merchants regularly engaged in barter trade. They swapped corn, beans, and rice for fish, goats, and farmland. As a result of the trades, Cambodia’s economy and its foreign relations significantly improved. The progressive trend went on until 1867 when the French colonized Cambodia. French authorities introduced their currency to the Cambodian economy. The colonizers started a bank in Cambodia’s capital city, Phnom Penh, where they printed paper currency and distributed it throughout Cambodia.
Creation of Cambodian Riel
Cambodia gained independence from France in 1953. In the same year, the Bank of Cambodia minted and issued riel in different denominations. The currency was divided into units of 100 centimes. The round coins used as currency were made of aluminum. Cambodian riel was used alongside the piaster as the legal tender of Cambodia. However, piaster slowly lost popularity to the riel, and by the end of 1955, the piaster was no longer in circulation. The use of Cambodian riel as legal tender was temporarily halted in 1975 when Khmer Rouge took up leadership of Cambodia.
Khmer Rouge Period
When the Khmer Rouge movement took charge of Cambodia, the brutal leader Pol Pot abolished all forms of currency in Cambodia. He enforced communal living where people shared all resources. The people of Cambodia resorted to barter trade. Although bank notes continued to be produced, the notes were never released to the public. Cambodia’s economy greatly suffered under the Khmer Rouge regime.
Re-establishment of the Riel
When Vietnamese forces invaded Cambodia in 1978, they removed Khmer Rouge from leadership. The Cambodian riel was re-introduced into the economy in 1980. At the time, the economy of Cambodia was already in tatters. Cambodian authorities freely gave out the riel to Cambodians to boost its use. In today’s Cambodia, the riel is still the official legal tender. However, many Cambodians use the US dollar in trading activities. People who live in towns that border Thailand and Vietnam commonly use the Thai baht and the Vietnamese dong.
Future of Cambodian Currency
The Cambodian currency has significantly lost popularity among the people of Cambodia. In fact, only a small rural population of Cambodians still uses the riel. Cambodians lost trust in the currency after high inflation rates eroded the value of the riel. Despite the decline in the riel, Cambodia’s economy continues to grow steadily. In the future, Cambodia’s economy may shift to the digital currency space.