ABSTRACT
This chapter reviews the academic discussions on currency substitution, dollarization, and euroization of developing and emerging economies by the selected issues and topics to highlight the experiences of dollarization in Cambodia. The experience of inflation in Latin America, the political and economic crisis in Zimbabwe, and violent conflicts in several countries resulted in dollarization, though with different consequences from the case of Cambodia. The tendency of dollarization in commodity exporters, especially crude oil, is also discussed. Focusing on the situations and environments of international financial flows, such as trade characteristics, the volume of remittances, the degree of capital control, and the functioning of the domestic financial market and interbank market, the characteristics of Cambodian dollarization are revealed. As world economies become closely integrated, a certain degree of partial financial dollarization is prevalent today. Therefore, the chapter concludes that the discussion and policies on dollarization and de-dollarization require not a polarized but rather an eclectic view.
