The riel is the official currency of Cambodia. It is a decimal currency with two subunits: 1/10 riel is a kak and 1/100 riel is a sen. Although the riel is the official currency, it is not the most commonly used currency in Cambodia as most transactions are made in U.S. dollars. Riels are only used for fractional dollar amounts, such as minor purchases of less than one dollar and in rural communities. The riel exchanges with the U.S. dollar at a rate of approximately 4000 riel: 1 USD, so 40 riel is the equivalent of 1 U.S. cent. The riel is issued by the National Bank of Cambodia, the nation’s central bank.
The first Cambodian riel was introduced in 1953 as a currency dually denominated with the piastre. It was issued by a joint currency board for Cambodia, Laos and Vietnam. This riel lasted until the takeover of the country by the Khmer Rouge in 1975. Money was abolished in the country from this time until 1980 when the second riel was introduced at a rate of 4 riel: 1 USD. Since no legal currency existed at its introduction, the new riel was given away to the population to encourage its use. When the United Nations occupied Cambodia in 1993, U.S. dollars were introduced into circulation as an unofficial currency, which remains popular today, especially in urban areas.
The economy of Cambodia is still largely affected by the civil, political and economic crisis that occurred in 1997 and 1998, five years after the U.N. occupied the country to quell civil and political violence that erupted since the fall of the Khmer Rouge. Some economic progress was made in 1999 after reforms were put into place, and Cambodia experienced 5 percent annual growth from 2000 to 2005. Most growth has been due to expansion of the textile industry and increased tourism. The largest industry in Cambodia is agriculture, with 75 percent of the population working in subsistence farming. The greatest obstacles in the path of continued growth are a lack of education and skilled workers. An obstacle to overcome in the future is the creation of enough jobs to support the population, over half of which is under 20 years of age.