Prime Minister Hun Manet said the issuance of new 50,000-riel and 10,000-riel banknotes is aimed at replacing worn-out currency and strengthening anti-counterfeiting measures, rejecting concerns that the move signals a shortage of government funds.
Speaking during the inauguration of National Road 10 in Pursat province’s Veal Veng district on October 1, he said replacing old banknotes is a routine process and urged the public not to be alarmed by claims about a potential economic or banking crisis.
Mr Hun Manet said:
The National Bank has issued new 50,000-riel and 10,000-riel banknotes. The objective of this issuance is to strengthen the currency’s integrity and, crucially, to enhance security measures to prevent counterfeiting. If there is a significant amount of counterfeit currency, new technology allows security features to be incorporated into new banknotes, making them difficult to forge.
They may look the same at a glance, but when held up to the light, the genuine security details are revealed. High-denomination banknotes are the ones most widely circulated and most susceptible to counterfeiting; people rarely bother to forge 1,000-riel notes, whereas a 50,000-riel note is worth about US$10, and a 100,000-riel note is worth about US$25.
Regarding the issuance of these notes, there are two main objectives: first, general circulation; and second, replacing old currency bills. People may not realise that banknotes wear out and that the National Bank has to collect and destroy them.
I was surprised when I looked at the data regarding the volume of old, shredded banknotes. For instance, in May alone, 72.9 million notes were shredded. In August—a month with a particularly high volume—118.9 million old notes were returned and destroyed, representing a total value of 888 billion riels. In September alone, the volume of old banknotes collected and subsequently shredded or incinerated amounted to 92 million—nearly 93 million—notes. When aggregated, the total number of notes collected and destroyed between May and September reached 435 million.
Banknotes in circulation inevitably suffer wear and tear—some become torn or too old—requiring them to be withdrawn so that new ones can be issued. Consequently, the printing of new currency is an ongoing, routine process; it is not something that has just started. For instance, when 92 million notes are destroyed in a month, 92 million new ones are printed and released; it is a continuous cycle of inflow and outflow. Thus, this currency exchange is simply part of the standard operational cycle.
What the state needs to address is the fear-mongering—claims that the government has run out of money or is on the verge of bankruptcy, or warnings for people to withdraw all their funds from banks. While the National Bank has previously explained the reasons behind the printing of new currency, the reach of those explanations—even when delivered by senior officials—pales in comparison to the spread of alarmist narratives. For every 10,000 people who see the official explanation, millions may be exposed to fear-mongering, leading to widespread anxiety. Consider this: while 50,000 people might understand the situation, a million others may be afraid. We cannot underestimate the significance of this. It is a matter of fear; the feeling of dread regarding ghosts is often worse than actually seeing one.
It is like the anxiety surrounding a potential economic collapse: people see the state injecting money and assume it means the government has run out of funds. So, what happens to the economy?
People withdraw money from banks. While there may be isolated issues with one or two banks, our banking system remains robust, and people are depositing and managing their money as usual, so there is no need to worry. The state has not run out of money.
Regarding the issuance of new currency, if the government were truly out of funds, it would not go through the elaborate process of announcing and preparing a new currency series; it could simply print more of the existing notes quietly, in any quantity desired. But that is not necessary here.
The state needs to issue this new currency because the old notes have been in circulation for over a decade. The 100,000-riel note was introduced in 2012, and the 50,000-riel note in 2013, so they have been in circulation for more than 10 years. Therefore, we are making minor adjustments to avoid overcrowding, but the priority is the security system to prevent fraud. I want to emphasise that the state will not lack funds.
