IDEAS home Printed from https://ideas.repec.org/a/eee/japwor/v60y2021ics0922142521000487.html
   My bibliography  Save this article

Real dollarization in Phnom Penh, Evidence from two surveys

Author

Listed:
  • Hay, Chanthol

Abstract

This paper aims to identify real dollarization in markets in Phnom Penh and to investigate how U.S. dollar (USD) and Cambodian riel or Khmer riel (KHR) perform the three functions of money—a unit of account, a store of value and a medium of exchange in markets in Phnom Penh through two simple surveys. Real dollarization refers to the use of the U.S. dollar for purchasing goods and services and for paying salary. We find that the choice of currency for transactions varies with market types, sources of products whether they are imported or domestically produced, and prices of products. The survey about currency for salary payment shows that the majority of employed persons in the private sector and in non-government organization receive salary in U.S. dollar while those who work in public sector receive salary in Khmer riel. The majority of employed persons save their money in U.S. dollar. In general, U.S. dollar dominates Khmer riel in performing the three functions of money in Phnom Penh.

Suggested Citation

  • Hay, Chanthol, 2021. "Real dollarization in Phnom Penh, Evidence from two surveys," Japan and the World Economy, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:japwor:v:60:y:2021:i:c:s0922142521000487
    DOI: 10.1016/j.japwor.2021.101102
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0922142521000487
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.japwor.2021.101102?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rudi Dornbusch, 2001. "Fewer Monies, Better Monies," American Economic Review, American Economic Association, vol. 91(2), pages 238-242, May.
    2. Ize, Alain & Yeyati, Eduardo Levy, 2003. "Financial dollarization," Journal of International Economics, Elsevier, vol. 59(2), pages 323-347, March.
    3. Fukuda, Shin-ichi & Kano, Takashi, 1997. "International Price Linkage within a Region: The Case of East Asia," Journal of the Japanese and International Economies, Elsevier, vol. 11(4), pages 643-666, December.
    4. Ken Odajima & Daiju Aiba & Vouthy Khou, 2019. "Currency Choice in Domestic Transactions by Cambodian Households: The Importance of Transaction Size and Network Externalities," Working Papers 185, JICA Research Institute.
    5. Fukuda, Shin-ichi & Ono, Masanori, 2006. "On the determinants of exporters' currency pricing: History vs. expectations," Journal of the Japanese and International Economies, Elsevier, vol. 20(4), pages 548-568, December.
    6. Kiwon Kang, 2005. "Is Dollarization Good for Cambodia?," Global Economic Review, Taylor & Francis Journals, vol. 34(2), pages 201-211.
    7. Mr. Guillermo Calvo & Mr. Carlos A. Végh Gramont, 1992. "Currency Substitution in Developing Countries: An Introduction," IMF Working Papers 1992/040, International Monetary Fund.
    8. Ito, Takatoshi & Koibuchi, Satoshi & Sato, Kiyotaka & Shimizu, Junko, 2016. "Exchange rate exposure and risk management: The case of Japanese exporting firms," Journal of the Japanese and International Economies, Elsevier, vol. 41(C), pages 17-29.
    9. Sovannroeun Samreth, 2010. "Currency substitution and seigniorage-maximizing inflation: the case of Cambodia," Applied Economics, Taylor & Francis Journals, vol. 42(15), pages 1907-1916.
    10. Aiba, Daiju & Odajima, Ken & Khou, Vouthy, 2018. "Foreign currency borrowing and risk-hedging behavior: Evidence from Cambodian households," Journal of Asian Economics, Elsevier, vol. 58(C), pages 19-35.
    11. Edwards, Sebastian & Magendzo, I. Igal, 2006. "Strict Dollarization and Economic Performance: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(1), pages 269-282, February.
    12. Samreth,Sovannroeun & Sanchez Martin,Miguel Eduardo & Ly,Sodeth, 2019. "Dollarization Dilemma : Price Stability at the Cost of External Competitiveness in Cambodia," Policy Research Working Paper Series 8893, The World Bank.
    13. Ito, Hiro & Kawai, Masahiro, 2016. "Trade invoicing in major currencies in the 1970s–1990s: Lessons for renminbi internationalization," Journal of the Japanese and International Economies, Elsevier, vol. 42(C), pages 123-145.
    14. Mr. Adam Bennett & Mr. Eduardo Borensztein & Mr. Tomás J. T. Baliño, 1999. "Monetary Policy in Dollarized Economies," IMF Occasional Papers 1999/003, International Monetary Fund.
    15. Nicolo, Gianni De & Honohan, Patrick & Ize, Alain, 2005. "Dollarization of bank deposits: Causes and consequences," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1697-1727, July.
    16. Hee-Ryang Ra, 2008. "Modeling the Dollarization: A Case Study for Cambodia, Laos, and Vietnam," Global Economic Review, Taylor & Francis Journals, vol. 37(2), pages 157-169.
    17. Menon, Jayant, 2008. "Cambodia's Persistent Dollarization: Causes and Policy Options," Working Papers on Regional Economic Integration 19, Asian Development Bank.
    18. Mr. Luis Catão & Mr. Marco Terrones, 2016. "Financial De-Dollarization: A Global Perspective and the Peruvian Experience," IMF Working Papers 2016/097, International Monetary Fund.
    19. Andrew K. Rose & Eric van Wincoop, 2001. "National Money as a Barrier to International Trade: The Real Case for Currency Union," American Economic Review, American Economic Association, vol. 91(2), pages 386-390, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chanthol Hay, 2021. "Dollarization and macroeconomic performance in Cambodia since the first 1993 general election: a historical perspective," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 10(2), pages 27-46, April.
    2. Samreth, Sovannroeun, 2011. "An empirical study on the hysteresis of currency substitution in Cambodia," Journal of Asian Economics, Elsevier, vol. 22(6), pages 518-527.
    3. Levy Yeyati, Eduardo & Sturzenegger, Federico, 2010. "Monetary and Exchange Rate Policies," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4215-4281, Elsevier.
    4. Samreth, Sovannroeun & Sok, Pagna, 2018. "Revisiting the Impacts of Exchange Rate Movement on the Dollarization Process in Cambodia," MPRA Paper 91240, University Library of Munich, Germany.
    5. Raheem, Ibrahim Dolapo & Asongu, Simplice A., 2018. "Extending the determinants of dollarization in sub-Saharan Africa: The role of easy access to foreign exchange earnings," Research in International Business and Finance, Elsevier, vol. 45(C), pages 106-120.
    6. Helmut Stix, 2008. "Euroization: What Factors drive its Persistence?," Working Papers 140, Oesterreichische Nationalbank (Austrian Central Bank).
    7. Fujiki, Hiroshi & Otani, Akira, 2002. "Do Currency Regimes Matter in the 21st Century? An Overview," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 20(S1), pages 47-79, December.
    8. Kyriakos C. Neanidis & Christos S. Savva, 2006. "The Effects of Uncertainty on Currency Substitution and Inflation: Evidence from Emerging Economies," Economics Discussion Paper Series 0609, Economics, The University of Manchester.
    9. Vieira, Fabrício A.C. & Holland, Márcio & Resende, Marco F., 2012. "Financial dollarization and systemic risks: New empirical evidence," Journal of International Money and Finance, Elsevier, vol. 31(6), pages 1695-1714.
    10. Eduardo Levy Yeyati, 2006. "Financial dollarization: evaluating the consequences [‘A simple model of monetary policy and currency crises’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 21(45), pages 62-118.
    11. Sebastian Edwards, 2011. "Exchange-Rate Policies in Emerging Countries: Eleven Empirical Regularities From Latin America and East Asia," Open Economies Review, Springer, vol. 22(4), pages 533-563, September.
    12. Marcelin, Isaac & Mathur, Ike, 2016. "Financial sector development and dollarization in emerging economies," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 20-32.
    13. repec:onb:oenbwp:y::i:159:b:1 is not listed on IDEAS
    14. Anna Krupkina & Alexey Ponomarenko, 2017. "Deposit dollarization in emerging markets: modelling the hysteresis effect," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(4), pages 794-805, October.
    15. Eduardo Levy-Yeyati, 2011. "Exchange Rate Regimes," Business School Working Papers 2011-02, Universidad Torcuato Di Tella.
    16. Mr. Geoffrey J Bannister & Mr. Jarkko Turunen & Malin Gardberg, 2018. "Dollarization and Financial Development," IMF Working Papers 2018/200, International Monetary Fund.
    17. repec:onb:oenbwp:y::i:126:b:1 is not listed on IDEAS
    18. Honig, Adam, 2009. "Dollarization, exchange rate regimes and government quality," Journal of International Money and Finance, Elsevier, vol. 28(2), pages 198-214, March.
    19. Reza Y. Siregar & Narith Chan, 2014. "Factors behind Foreign Currency Holding by Household in Cambodia," CAMA Working Papers 2014-58, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    20. Issa Hijazeen & Ali Al-Assaf, 2018. "Dollarization in Jordan," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 14-24.
    21. Mansour-Ichrakieh, Layal & Zeaiter, Hussein, 2019. "The role of geopolitical risks on the Turkish economy opportunity or threat," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    22. Sebastian Edwards, 2006. "Monetary unions, external shocks and economic performance: A Latin American perspective," International Economics and Economic Policy, Springer, vol. 3(3), pages 225-247, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:japwor:v:60:y:2021:i:c:s0922142521000487. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505557 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.