Gold Exports Fall as Imports Rise

The IMF has noted a drastic increase in gold imports to Cambodia while exports have fallen, as it notes the “slow” increase of the use of riel nationwide
People shop for gold in a shop in Phnom Penh, August 10, 2022. Kiripost/Siv Channa
People shop for gold in a shop in Phnom Penh, August 10, 2022. Kiripost/Siv Channa

Cambodia’s imports have been large this year, with a lot of it due to an increase of imports of gold, in contrast to the country’s exporting of gold last year, the International Monetary Fund (IMF) has said.

The IMF said in a statement on Tuesday that data for the import and export of gold have been extremely volatile, and a large proportion of short-term financial inflows are unexplained, making external sustainability assessment difficult.

The IMF added it will continue to provide technical assistance to help improve data accuracy, and in many other areas of capacity development.

In a virtual press conference before the statement, Alasdair Scott, IMF Mission Chief for Cambodia, said that Cambodia exported gold last year. However, this year, it is the opposite.

“That said, in our baseline projections, we are expecting a steady reduction in the current account deficit on the assumption that exports continue to recover as the general economy recovers and gold imports decline, but there’s a lot of uncertainty about that,” Scott said.

Scott also commented on the ongoing campaign by the National Bank of Cambodia (NBC) to increase the use of local currency riel, something that he sees is slowly progressing.

The NBC has been campaigning for the increased use of riels, with live concerts and exhibitions in provinces, including in Kampong Thom, Battambang and Kep.

The use of the dollar is extensive in Cambodia. The level of deposit at banks is over 90 percent, Scott said, adding that for people like him, dollar bills can be used easily in everyday transactions.

“That's good for tourists because it makes life a lot easier to be able to bring in a major currency. But ultimately, it would be good for Cambodia to have more extensive use of the domestic economy,” Scott said.

He added that is because in the long-run, Cambodia would like to see more control by the NBC on the monetary policy. The IMF has been providing technical parts to the NBC to reduce on the dollars and make the realization to encourage the use of the riels.

“It is a little bit of progress going slow because people naturally want to use dollars even in business and even exporters are often required to do their contracts in dollars,” he said. “But over time, the direction is there for the increased use of the riel.”