ABSTRACT
In Cambodia, the level of financial dollarization is extremely high. This chapter investigates financial dollarization in Cambodia from the broad data sources about financial institutions. It reveals that financial institutions collect foreign currency mainly in the urban area of Phnom Penh, and reallocate it to rural areas. In other words, financial institutions spread dollarization over the country through their branch networks and the credit-creation process. This chapter also provides the recent progress of promotion of KHR relating to the recent policy implementation by the central bank of Cambodia. Lastly, it provides evidence that the level of US dollar cash declined in the market during the COVID-19 pandemic period, suggesting that the supply of US dollars is not stable in an international economic downturn.
