ABA Bank has stopped dispensing small dollar bills at its ATMs in a bid to infuse more Khmer riel into the economy and due to increased demand for use of local currency.
Customers of the bank have been posting online for around a month about the bank only offering $100 or more cash withdrawals at its ATMs, with no option to get bills of smaller denominations. Instead, the ATM also offers the option to withdraw cash in Khmer riel, starting with 50,000 riel notes, which is around $12.50.
“ABA Bank now only has ATMs for the rich people? A poor person like me, I can’t even withdraw $20 and more?” posted one Facebook user on Monday.
ABA chief marketing officer Igor Zimarev said that the bank was shifting to issuing more Khmer riel because there was increased demand for local currency.
“Of course we are doing this because the demand for Khmer riel is now getting more and more and supply of Khmer riel is much more than for dollars,” he said.
Zimarev said this was the bank’s own initiative and was not a National Bank of Cambodia instruction. He said there weren’t many $10, $20 and $50 notes in their system, and that they were mostly dirty or torn. The ABA officer said they would work with the National Bank to send these back to the U.S. Federal Reserve.
The initiative had elicited reactions on Facebook, Zimarev said, and the bank was working to address customer feedback, especially the availability of 50,000 riel notes in ATMs.
“Due to some technical restrictions we cannot put smaller denominations,” he said, adding that they were starting to offer 20,000 riel bills as well.
Cambodia is a highly dollarized economy and the National Bank of Cambodia routinely campaigns to increase the use of riel in the economy. In 2020, it started a campaign to remove $1, $2 and $5 bills from the economy, with residents now using smaller riel denominations for small change. The central bank also requires financial institutions to hold at least 10 percent of their loan portfolio in riel.
A highly dollarized economy prevents the national bank from implementing monetary policies, leaving the export-driven economy vulnerable to interest rate changes and monetary fluctuations by the U.S. Federal Reserve.
In Channy, the president of Acleda Bank, only said the bank would continue dispensing small dollar bills and riel bills.
