A high-level of dollarisation, largely attributable to the presence of United Nations personnel and peacekeepers in the early 1990s, has largely been the reason for a relatively stable Khmer riel. The recognition of foreign currencies as valid legal tender under statute ensured the existence of a competing currency in the market, enforcing discipline on the central bank by preventing manipulation of interest rates, inordinate expansion of money supply and ensuring that inflation remains relatively low.
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