While Cambodia maintains a stable exchange rate and inflation below 1 per cent, seasonal economic patterns continue to influence the value of the riel, particularly during national holidays and other key financial periods.

Speaking during a discussion with journalists and financial experts on “Promoting Financial Literacy and Responsible Credit Use”, Rath Sophoan, chairman of the Association of Banks in Cambodia (ABC) shared his observations.

The March 26 event was organised by the Credit Bureau Cambodia (CBC) and the Club of Cambodian Journalists (CCJ).

Sophoan highlighted how predictable short-term fluctuations of the riel occur during certain times of the year due to shifts in demand.

“The riel has appreciated slightly during this period because all companies have to pay a 20 percent profit tax [in riel],” he explained.

“During the New Year holidays, the demand for riel is high, including during the Pchum Ben holiday. When farmers harvest their crops, the Khmer riel also rises,” he added.

He described the changes as minor and said they do not indicate broader economic instability.

Sophoan pointed out that compared to other nations where currency depreciation has led to soaring inflation, Cambodia’s exchange rate has remained largely consistent, hovering around 4,000 riel per US dollar in recent years.

The annual financial cycle in Cambodia sees predictable increases in demand for the local currency during key national holidays such as Khmer New Year and Pchum Ben.

During these periods, cash transactions surge as families travel, businesses see higher consumer spending and individuals exchange foreign currencies for riel to cover holiday expenses.

Another key factor affecting the riel is tax season, as businesses are required to pay a portion of their corporate taxes in the national currency.

This increases the demand for riel and leads to a slight appreciation in its value, albeit temporarily.

Sophoan reassured the audience that the fluctuations remain within normal levels and do not pose risks to Cambodia’s economy.

“This is a very small change for Cambodia, and there is nothing wrong with it. It would change significantly if the riel dropped to 3,900, 3,800, or 3,700 per dollar, but we are not seeing such movements,” he said.

He added that a stronger dollar, if it rises sharply, could pose challenges by making Cambodian exports more expensive and increasing the cost of goods for tourists, given the widespread use of the US currency in the country.