{"id":1929,"date":"2019-05-17T01:01:36","date_gmt":"2019-05-16T18:01:36","guid":{"rendered":"https:\/\/capitalcambodia.com\/?p=1929"},"modified":"2019-05-17T06:00:20","modified_gmt":"2019-05-16T23:00:20","slug":"chinese-yuan-banking-transactions-to-rise","status":"publish","type":"post","link":"https:\/\/capitalcambodia.com\/chinese-yuan-banking-transactions-to-rise\/","title":{"rendered":"Chinese yuan banking transactions to rise"},"content":{"rendered":"
As more Chinese investment and trade enter Cambodia, the usage of yuan is expected to grow as banks facilitate cashless transactions<\/em><\/p>\n Although economic ties between China and Cambodia have strengthened, Chinese yuan inflow in the Kingdom\u2019s banking sector remains relatively small compared to the US dollar.<\/p>\n Last year, the use of Chinese yuan in cross-border trade and transaction with China amounted to just two percent while deposit and credit in yuan in the banking system was about one percent.<\/p>\n \u201cChinese yuan inflow is especially generated by tourism, trade and investment,\u201d National Bank of Cambodia director-general Chea Serey tells Capital Cambodia via email.<\/p>\n Despite the small percentage, Chinese yuan has contributed to Cambodia\u2019s economic growth. She cites the example of Chinese direct investment which represented 40 percent in 2018 of the total foreign direct investment (FDI) to Cambodia. In 2017, trade between the countries made up 23 percent of total trade while 34.8 percent of total tourist arrivals were Chinese.<\/p>\n \u201cThe yuan inflow depends on the size of the trade, investment and tourism between the two countries and the willingness to transact in yuan,\u201d Serey adds.<\/p>\n Cambodia\u2019s foreign currency reserve comprises US dollar, euro, yen, pound sterling and yuan. Understandably, the US dollar is the dominating currency in the Cambodian economy. Therefore, if there are issues with the dollar, Cambodia can expect to suffer the consequences.<\/p>\n \u201cOur foreign reserves amount to $10.5 billion but choosing the composition of currency as foreign exchange reserves would depend on trading activities between Cambodia and the rest of the world,\u201d she says.<\/p>\n NBC gross international reserves are in different currencies but dominated by US dollar, given its dollarised economic context, she adds.<\/p>\n