Transferring currencies in Cambodia As an AVI volunteer our living and housing allowances are paid quarterly into an Australian bank account in Australian dollars (Aud). There are a variety of ways then for us to access cash in Cambodia. One common way is to use an Australian bank debit card (they are more secure than a credit card and you can still use them in the same way) linked to an Australian bank account and take out only as much cash as you need thereby not having large amounts of money lying around which potentially could be stolen. Another is to transfer the whole of the quarterly payment to a local bank account soon after it is paid and withdraw periodically from a local ATM. However none of these take into account the fluctuations between the Aud and the US dollar which potentially could cost or save you hundreds of dollars each quarter. There are two main currencies used in Cambodia, the US $ and the Cambodian Riel. For this exercise we will ignore the Riel as the US$ is accepted pretty much everywhere in Cambodia and in many cases (especially the cities) is the preferred currency. Both the US$ and the Au$ are called floating currencies. That is the governments of both countries allow them to be bought and sold on the open market with little intervention and hence both currencies can fluctuate significantly. You should think of these currencies as a commodity such as wheat that have many influences on what they are worth and consequently their price changes (such as wheat when there is a drought). Most currencies are measured against the US$ as it is (still) the dominant worldwide currency. Put very simply if the US economy is going well then the US$ is likely to be strong and vice a versa. It is the same with the Au$. So what do we mean by a strong dollar? Well most currencies are measured by how many it takes to buy one US dollar. At the moment it takes approximately Australian one dollar, twelve cents to buy one US$. That is a strong $Aud. Back in about May 2010 it took one dollar twenty cents to buy one $US. So if you are transferring Australian Dollars into $US in Cambodia the closer the currencies are to each other the more money you will have here in Cambodia to spend (i.e. you won’t lose by transferring). Another example is if today (6th Sept 2010) you transfer $1000 Australian dollars into $US in Cambodia you would get US $916.00 which is without fees etc. If you had done it about 4 months ago you would have only got around $US 820.00 (the difference, US$96, is quite a few gin and tonics at a local bar). You will see in a variety of places such as newspapers, your banks web site etc quotes on the Aud price. They often vary on how they are quoted such as .80 or 1.20 (these are both the same) depending which currency is divided by the other first. Remember what the rate is may differ markedly from what you actually get because banks etc often change their rates from the official price by as much as 3‐4 cents. It is like a hidden fee! So how do you know when to change your currency? Well you never will exactly and you shouldn’t even try as there are many people and organizations that spend millions of dollars to determine that and usually fail. What we can do is be aware of the difference and try to average a reasonable rate over time so it benefits us.
Greg Martin: Cambodia, September 2010
Historically the average difference between the $US and $Aus has been approximately AU $1.20 (.80) for one US$. As recent as 2008 it was Au $1.40 (.60) for one $US and currently is about $1.10 (.90) for a $US. In percentage terms that is quite significant. For example in order, Aus $1000 = US$800, US$600 and currently around US$900. So as a general rule when the difference between the two currencies is narrow (say above $1.20 or .80) as it is now then you should probably try to transfer as many AU$ into US$ as is practicable and when it is poor as it was in 2008 try and transfer as little as possible. There is no way of knowing how far up or down it may go. Just be satisfied with getting a good average. The following one and five year charts give a view of how much the difference between the two currencies fluctuates and an idea of what the difference between the two currencies is now.
One year chart US /AUD
5 year chart US / AUD A good web site to check on what the currencies are doing is http://www.advfn.com/currency‐converter/us‐to‐australian‐dollar.html
Greg Martin: Cambodia, September 2010