Summary of the Potential Effects of Dollarization.
This paper is concerning to the clarification of dollarization performance in the economy worldwide. The paper focuses on dollarization of the monetary sector, and in particular on holdings asset by residents of foreign currency deposits. The paper acknowledges, however, dollarization of monetary assets popularly is part of a big process of financial market integration. Interestingly, dollarization in Cambodia will be specified properly and focuses on different situations due to political stability cases and unstable political situation cases economically. Furthermore, this paper will provide the clarification relates to dollarization in Cambodia such as; existing of dollarization, influences of dollarization, advantages of dollarization, disadvantages of dollarization, and emergence of dollarization clearly. A strong inward flow of dollars related to garments sector exports, aid, tourism receipts, and foreign direct investment has benefitted dollar in the urban economy rather than in rural economy. Based on international experiences in de-dollarization in Cambodia, economists have been carefully managed market based approach, and encouraged by a continued stable macroeconomic condition is essential for Cambodia's de-dollarization.
II. Introduction to Dollarization in the World Economy.
Economically, dollarization performances are analyzed and boosted the economy to be more critical and crucial for people in the world. However, people all over the world use their own domestic currency, but dollars are still existed in almost the world, which is known as dollarized world. Furthermore, the most common currency, which exists everywhere, in the world, is specifically the U.S dollar. Nevertheless, the U.S dollar is the most common currency, but it also has advantages and disadvantages in circulation around the world. Specifically, most of countries in the world now have been being dollarized day to day in term of potential exchanges in economy.
