• Economics

Polymer Banknotes Gains Interest Among Economists

• By Ou Sokmean
• March 5, 2024 11:55 AM

PHNOM PENH – Despite the rise of electronic payments over the past three years, the riel currency remains significant in Cambodians’ daily lives and many still use banknotes for their transactions. Economists and entrepreneurs, therefore, show their interest in printing polymer banknotes. 

Polymer banknotes are made of plastics including biaxially-oriented polypropylene (BOPP) and blown polypropylene films, which can be recycled, unlike normal banknotes that have to be destroyed when they expire. 

Being stronger than the existing paper banknotes, polymer banknotes would not only encourage Cambodians to use riel, but it would also help the government reduce the cost of often printing new banknotes, said Mengly Jandy Quach, a doctor, entrepreneur, and the founder of the Mengly J. Quach Education. 

“To encourage people to use the banknotes in the long run – rather than print more often – polymer banknotes is a good idea that European and developed countries have already been using,” he said. 

Polymer banknotes resist better to dirt and water and can be washed. Using polymer banknotes will “make the citizens proud and happy, thinking that Cambodia is as modern as foreign countries,” according to Quach.

The publication of polymer banknotes will increase the quality and durability of the currency. While digital payments have remarkably increased since the COVID-19 pandemic and the introduction of the Bakong currency – which enables bank-to-bank transfers and payments – paper money remains a strong basis on which the economy relies.

According to Srun Sopheak, an economics lecturer at the Royal University of Law and Economics (RULE), the National Bank of Cambodia (NBC) should take this opportunity to strengthen the quality of riel banknotes while the use has decreased these days. 

“We don’t need banknotes as much as before, but in this sense, we can think of printing them from plastics to improve their quality. The new banknotes will urge people to value it and want to use it more,” Sopheak said. 

“Especially, people will be proud to use it when the national banknotes are as modern as those in developed countries such as the UK, Canada, and Australia who are also using polymer banknotes,” he added. 

The benefit of polymer banknotes is their recyclability, which is different from a paper banknote that must be destroyed after being torn off or ruined. 

Mar Amara, senior executive vice president of the ACLEDA Bank, also considers that printing polymer banknotes is a good idea.

Banknotes made of plastic can be recycled five times, so their appearance and quality are important elements to encourage people to use the riel banknotes even more. 

On the other hand, Ky Sereyvath, a researcher in economics at the Royal Academy of Cambodia (RAC), claimed that Cambodia is not yet able to print such notes, as the country still lacks the infrastructure, appropriate printers, and raw materials.

“Printing polymer banknotes requires spending a lot in building a new printing hall, while the use of banknotes is not popular among people. On the contrary, [the NBC] could use this financial ability in the form of cash relief to combat the loss of interest rates or provide other financial services to the people”, the researcher said. 

The economist believes that if the government decides to shift to polymer banknotes anyway, the move should be done in stages in order not to spend too much on funding a new infrastructure.

“When the used banknotes are not recyclable [anymore], people will shift to polymer banknotes,” he said. 

 

Originally written in Khmer for ThmeyThmey, this story was translated by Meng Seavmey for Cambodianess.