Which is the Riel Currency?
Cambodia has two currencies, well, one the official Cambodian currency and one unofficial currency, or is it two official currencies; sometimes it is hard to tell. People new to Cambodia find the arrangement baffling; paying in one currency and getting change in another or change in both is unusual. What’s it all about?
What’s the Deal with the Riel?
The official currency is the Riel. The unofficial currency is the US dollar.
I will begin with an anecdote which highlights the confusion. A long-term resident of Phnom Penh from Australia encountered a Japanese man who had just been transferred to Cambodia by his company. He had walked into a service station and bought a drink. As he was walking out, he had a baffled look on his face as he looked at his bundle of dollars and riels. He noticed me looking then ambled over and sat down. He asked me why do Cambodians give me dollars and riels? I explained to him as the Cambodians use dollars but not the coins, they replace the coins with riels in the change. So, if you buy food for $3.50 and you give the cashier $10 then the change will be some dollars and some riels. He scratched his head, said thank you then walked off.
So, what’s the story here?
All places will accept riels. In fact, there are some places that will only accept riels. Unusual in Phnom Penh and Siem Reap but don’t be surprised if you happen across a business that demands riels. The exchange rate is about 4,020 Riels for $1.
This rate hasn’t changed much over the years. If you work with 4,000 riels to the dollar then this will add some clarity to transactions: 1,000 riels is 25¢, 2,000 riels is 50¢, and 3,000 riels is 75¢. You could go further with 100 riels is 2.5¢ and 500 riels is 12.5¢ but it is usually not necessary to delve that deeply into the process.
Straightforward, wouldn’t you say? One result of this is that the more transactions you make the bigger your wad of riels become, you know, a brick of 100s and 500s that amounts to $2 or $3, but an annoying bulging wallet and an inviting target for someone with light fingers.
The US Dollar
Dollars can be used all over Cambodia. As pointed out, the system in Cambodia doesn’t use US coins, otherwise what’s the point of riels at all. When you pay in dollars you will get change in riels or riels and dollars. And that is not all. The riels are rounded up and dollars rounded down, so you are actually hit with a surcharge. How it works is as follows: make a payment in riels for a dollar purchase and the 4,020 riels to the dollar rate is used. Make a payment in dollars and the 4,000 riels rate is used.
This is the experience in many restaurants popular with foreigners. A lot of menus in these places have amounts listed in dollars and typically not whole amounts. So, if you order a meal for $3 and pay in riels it will cost 12,060 riels. For a $2.50 meal then you pay $2 and 2,000 riels or pay $3 and get 2,000 riels in change. Often, if you have a bill for $15 and you give the waitress $20 then they often give you a few dollars and a lot of riels in change. Again, the restaurant makes a small amount on the transaction and this adds up after time.
So, why use the dollar? After years of Khmer Rouge deprivation, the Cambodian economy was savaged. The Vietnamese occupation didn’t see a huge improvement and the reintroduced Riel quickly devalued. The dollar helped buoy the country, and this really kicked in when the United Nations Transitional in Authority Cambodia were there in the early 90s. Salaries were in dollars, donations were in dollars and nearly all transactions were in dollars and since then the dollar has established itself as the preferred currency.
Any Other Currencies
To add further to the confusion, there are places where a third currency can be used: the Thai Baht is an example. Along the Cambodian-Thai border many places accept baht, dollars and riels. So, if you are entering Cambodia from Thailand and have a fist full of baht then don’t worry; you can exchange it and often spend it.
The Vietnamese and Lao borders don’t seem to be that interested in riels, but the Vietnamese Dong is used along the Cambodia-Vietnam border. Outside of Cambodia, it can be difficult if not impossible to get riels or exchange them for other currencies.
The Large Dollar Dilemma
When paying in dollars, make sure you have small denominations. Nothing worse than trying to pay with a hundred dollar note only to realise the restaurant can’t change it. One experience a foreigner had on Riverside was that the restaurant would change it but there would be a charge of $6. He politely refused, popped into the travel agency next door and changed it, which is what the waitress would have done and pocketed the $6.
The $2 Dollar and Damaged Note
Avoid $2 bills and damaged notes. They will not be accepted anywhere. Simply take them back to your own country where it will be far simpler to have them changed.
There are plenty of places to exchange money in Cambodia. Of course, the banks will help you but have charges and lousy exchange rates. Around the big markets, such as Central Market in Phnom Penh, you will find exchange and gold shops that offer good rates for many currencies.
Large denominations of dollars can cause problems when making purchases. If you are stuck with a $100 bill, then search for a Win store. These places offer all kinds of services and they are everywhere. At these places you can exchange large notes for US dollars and some riel: giving you riel is their way of making a bit of money on the transaction. In this case, for $100 you might receive $80 or $90 plus riels. It is a system you should follow because if you don’t the cashier could smile and politely say “cannot”.
Another way to get dollars and riels is through an ATM. However, keep in mind that these machines spit out large denominations which will present another problem as you will soon find out. At a pinch, travel agents will also exchange money.
When in Cambodia both currencies can be used. For US dollars keep denominations small and for the wads of riels you get, make sure you get rid of them as quickly as possible.