Cambodia’s official currency is the riel, but US dollars play an equally important role in the country’s monetary system. This unique situation of having two parallel currencies can be confusing for visitors. This guide explains Cambodian currency, when to use each, exchanging money, and the ongoing process of “de-dollarization”.

Cambodian Riel

The riel is the official currency of Cambodia. The exchange rate is around 4,000 riel to US$1. Riel come in banknotes of 100, 500, 1,000, 2,000, 5,000, 10,000, 20,000, 50,000 and 100,000 denominations – coins are generally not used.

Most purchases and transactions in Cambodia are quoted in riel prices, especially in the rural areas.

US Dollars

Despite the riel being the national currency, US dollars are widely used and circulating in Cambodia, a situation known as “dollarization”.

Dollars are accepted for payment everywhere, often interchangeably with riel, and some tourist businesses quote prices in dollars – Cambodia is essentially a dual-currency economy.

Accepted dollar banknotes are $1, $5, $10, $20, $50 and $100 (damaged or very old bills may be rejected).

Getting Riel vs Dollars

Visitors arriving at Phnom Penh and Siem Reap airports can exchange money for riel or dollars. ATMs also dispense both currencies (ask your home bank about foreign transaction fees).

Banks offer the best exchange rates. For informal exchanges, use official money changers in markets rather than individual touts on the street, and make sure to count your money carefully before and after.

Shop around as rates vary – expect better rates in cities like Phnom Penh over rural provinces and borders.

Border towns may also use Thai baht or Vietnamese dong. Don’t needlessly exchange between them as you can spend baht or dong directly.

Using Dollars vs Riel

As a tourist, either currency can be freely used in Cambodia. However:

• Have small riel notes for markets, tuk tuks, meals etc.
• Keep larger dollar bills ($10+, clean/new) for hotels, flights, big purchases
• Get change from dollars in a mix of riel and dollars
• Withdraw cash in dollars from ATMs
• Never rely entirely on either currency – use a mix of both

Dollarization in Cambodia

The extensive use of US dollars alongside the riel is referred to as “dollarization”. It began in the 1990’s as Cambodia rebuilt after the Khmer Rouge era.

Reasons for dollarization:

• US currency was more stable than the riel
• Influx of American aid and investment
• Popularity with tourists and expats
• Preference for dollars by locals to preserve value

This dollar dominance led to the riel losing value against the dollar. Today Cambodia is trying to reverse this trend through “de-dollarization” policies.

De-Dollarization Efforts

The Cambodian government and central bank would prefer the riel to be the primary currency to increase macroeconomic control.

Efforts to de-dollarize include:

• Phasing out small US notes – $1, $2 and $5 are being withdrawn from circulation, especially in Phnom Penh
• Encouraging riel pricing, payments and change
• Incentivizing riel deposits and loans
• Only allowing riel ATM withdrawals on foreign cards

These measures are slowly decreasing dollar usage, particularly in cities, but dollars remain popular nationwide.

To Sum Up

In summary, US dollars and Cambodian riel are both widely accepted currencies. Have smaller riel notes for daily use but keep some larger dollar bills for bigger payments. Use ATMs, banks and official exchanges to get both currencies. The balance between dollars and riel is evolving, but visitors who understand Cambodia’s dual-currency system should have no problems.