THE National Bank of Cambodia (NBC) has announced it will dip into its foreign reserves and buy US$6 million worth of Cambodian riels this week to hold up the value of the local currency, but an economist has warned that downward pressure will persist at least through the end of 2010.
In an announcement Friday, the central bank said it would take bids today, Wednesday and Friday at its Norodom Boulevard headquarters, putting up $2 million in US dollar holdings on each of the three days to buy riels.
Permitted bidders include commercial banks, licensed money changers and listed businesses.
NBC Director General Tal Nay Im said that because Cambodia was between harvests there was low demand for riels to buy agricultural produce, putting downward pressure on the value of the riel.
That pressure has been strong since the global financial crisis kicked in last year, she added, with plummeting business activity reducing demand for riels to pay workers.
The central bank intervenes regularly in the foreign exchange market to prop up the value of the riel. In early August it bought $2 million worth of riels daily for five days after the local currency hit a low of 4,191 against the greenback during the first week of the month.
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