Cambodia’s Curious Use of the US Dollar
The primary transactional currency in Cambodia is the US Dollar
Cambodian Riel are generally only used in small amounts, similar to US coins
Merchants in Cambodia are sticklers regarding the condition of dollar bills
If you Google “What currency does Cambodia use?” you’ll receive the deceptively simple answer of “Cambodian Riel.” While it’s true that Cambodia’s official currency is the Riel, visitors to Cambodia quickly learn it has limited usage. In practice, US Dollars are the dominant currency in Cambodia, relegating the Cambodian Riel to the role that pocket change plays in the US. In an effort to help others better prepare their wallets, below is what I learned about cash payments in the Kingdom of Cambodia.
My first indication that Cambodia’s currency situation was not so straightforward occurred at the neighboring Saigon airport. “I’m sorry, we don’t have Cambodian, sir” said the woman at the currency window. Thankfully, after landing in Cambodia, the Siem Reap airport currency counter sold me just over 200,000 Riel (about $50 USD). However, after visiting a few local businesses in Cambodia, it quickly became clear: Prices are in US Dollars, and almost all payments are in US Dollars.
The US Dollar’s dominance is omnipresent in Cambodia. Dollars are everywhere, but no coins, instead Cambodian Riel are used for amounts less than $1.00, at a general conversion rate of 4,000 KHR to $1.00 USD. This calculation is quick and easy for amounts of 25, 50, and 75 cents, but becomes challenging mental math for other amounts (for example, 37 cents = 1,480 riel, which just gets rounded to 1,500 in practice).
Returning to our initial question about what currency is used in Cambodia, a more accurate internet search response would be “US Dollars are the primary currency in Cambodia, with Cambodian Riel used in place of coins for amounts less than one dollar.”
As with all non-US territories using the US Dollar, there are a few unique transactional practices that Cambodia incorporates, here are a few of them:
Clean and new bills only
Cambodia likes its US Dollars crisp and clean, and they’ll even reject your payments if they don’t like the looks of your bills. At a Cambodian museum, I tried to pay with a ten dollar bill from 2013. The cashier shook her head, and told me it was “too old,” referring to the bill’s slightly darkened condition. I eventually paid with another ten dollar bill, commenting that it was just as good as the first one.
This is a major difference between the US and Cambodia; for Americans, the value of dollar bills is binary, bills are either worth their full amount or they are not valid. Cambodian merchants think differently, valuing dollar bills the way Americans value baseball cards. You’ll even see signs posted, or fine print on menus, saying that damaged bills cannot be accepted because US Dollars are not the official currency in Cambodia.
Big bills, resistance to change
Withdrawing $200 in cash from an ATM in a large Cambodian bank, the machine gave me two hundreds instead of ten twenties. In the US, ATMs rarely dispense hundreds or fifties, but Ben Franklin is a popular guy in Cambodian wallets. Yet ironically, many cash-only businesses in Cambodia often lack sufficient change. You can expect merchants to ask for smaller bills, or they might need to leave their own stores to go make change (the same thing may happen when paying with a twenty). Thankfully, if you withdraw cash from a bank during business hours, you can get smaller bills from the counter.
Close-enough conversion rate
While almost all prices in Cambodia are in US Dollars, change is given in Cambodian Riel at a conversion rate of 4,000 KHR to 1 USD. The market conversion rate is closer to 4,100 Riel to the Dollar, but everyone just rounds to 4,000. Consequently, you may get a marginally better price if you pay with pure Riel, but seeking this small discount would be difficult, inconvenient, and unwelcome for daily purchases.
Overlapping of currencies between $1 and $20
While Cambodian Riel are most often given as change in amounts less than $1.00, you’ll sometimes receive larger amounts such as a 20,000 Riel bill instead of $5.00. The overlapping use of currencies occurs up to the equivalent of $20. Beyond that amount, it is rare to deal in Cambodian Riel.
Local perspective: Even salaries are in USD
In Kampot, I met Sreyna, who kindly agreed to answer a few questions about Cambodia’s use of the US Dollars (although at first she was suspicious of the nosey American asking about money).
Sreyna told me there were no transactions for which only Cambodian Riel were accepted, “No, they always accept dollars, always.”
Another important local currency determinant is payment of salaries, so I asked Sreyna if people in Cambodia were paid in Cambodian Riel or US Dollars. She confirmed wages are paid in US Dollars, consistent with the rest of the economy.
Responding to questions about the lack of acceptance of dirty or damaged bills, Sreyna said merchants will often discount damaged bills, “The shops, they make money [from it].” She shared stories about having dirty or damaged bills accepted for lesser amounts (a damaged twenty valued at $17; a dirty hundred valued at $80). Sreynawas surprised to learn that cash in the US was not discounted based on condition, just as I was surprised by Cambodia’s reluctance to accept currency with normal wear and tear.
The Cambodian cash system seems to be working
While Cambodia’s use of US Dollars may seem peculiar to Americans, overall it seems to be working. I learned that the US Dollar has been in common circulation in Cambodia since around 2000, and people seem to like it.
Regarding long-term considerations, the dual-currency system appears relatively stable. I even found this BBC article from 2011 with observations that are surprisingly consistent with my own, including the 4,000 KHR to USD exchange rate.
As Cambodia is content with it’s currency situation, for the foreseeable future, visitors should be sure to pack their wallets with clean, crisp, US Dollars. And when it comes to change, leave your coins at home, the Cambodians prefer to keep it Riel (sorry).