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Friday, January 28, 2011

Money for nothing as visitors from Vietnam empty dollar-filled ATMs

Phnom Penh - Day-trippers from Vietnam have withdrawn millions of dollars from Cambodian cash machines to benefit from a sizeable gap between the official and black market rates of the US dollar and Vietnam's currency the dong, local media reported Friday.

Cambodia uses the dollar as a second currency along with its own currency, the riel.

The chief executive of Cambodia's ANZ Royal Bank, Stephen Higgins, told the Phnom Penh Post newspaper that customers of Vietnam's Techcombank had withdrawn 12 million dollars from his bank's cash machines since December.

They then exchanged those dollars into dong with currency traders, who offer the black market rate of 21,000 dong to the dollar, around 8 per cent above Hanoi's peg of around 19,500.

Because Techcombank processes the transactions at the official rate and charges very low international transaction fees, the customer banks a profit.

Even with charges, said Higgins, that would amount to 20,000 dollars per million dollars withdrawn.

'It's one of those things where one person figures out this is a way to make money, tells a few people who tell a few more people, and suddenly you get busloads of people coming across the border to try and do it,' Higgins said.

Customers of ANZ Royal, a part-owned subsidiary of Australian banking giant ANZ, could draw a maximum of 2,000 dollars in cash a day, although the bank has now cut that to 500 dollars.

Higgins said staff had noticed people withdrawing large sums of money using numerous different cards for each transaction. He said Techcombank's customers were running the same scheme at other banks in Cambodia and in the region, including in Singapore and China.

The arrangement has likely cost Techcombank 1.5 million dollars on withdrawals of at least 20 million dollars in recent weeks.

The newspaper said Techcombank was working with international credit card firm Visa to bring in new fees that would remove the arbitrage benefit.
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Cambodia Refuses To Lower Flag from Contentious Pagoda

A Cambodian flag flutters near an entrance gate to Cambodia's Preah Vihear temple on the Cambodian-Thai- border in Preah Vihear province.

Cambodia says it will not remove its flag from a pagoda on a disputed piece of land near Preah Vihear temple, despite a request from Thailand.

The Foreign Ministry said in a statement it would not comply with a request from Thai Prime Minister Abhisit Vejjajiva to remove the flag from Wat Keo Siha Kiri Svara.

Both sides claim the land surrounding the pagoda, which was also at the center of a prolonged military standoff that began in July 2008 and only ended a few months ago.

The Foreign Ministry called the “demand” for the removal of the flag “insulting” and said recent Thai military exercises near the border were “clearly provocative.”

“Cambodia reserves its legitimate rights to defend its sovereignty and territorial integrity,” the statement said.

The latest row follows the removal of a controversial placard on the border purporting to mark the place where “Thai troops invaded Cambodia” in July 2008 and withdrew on Dec. 1, 2010. That sign has been replaced with one that says, “Here! Is Cambodia.”

Cambodia lays claim to the Keo Sikha Kiri Svara pagoda via turn of the century maps and conventions between France and Siam, the former name for Thailand. The pagoda was built by Cambodians in 1998 on land claimed by Cambodia. For its part, Thailand has said in the past it disputes the maps used by Cambodia and demarks the border according to its own surveys.

Foreign ministers from both countries are slated to meet in Siem Reap next week for a bilateral meeting on security and cooperation.

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