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Economic policy on the agenda

The National Bank of Cambodia (NBC) yesterday held its inaugural “macroeconomic conference”, an annual event that aims to garner input from economists, researchers and the financial operators into future economic policy formation.

Held at Raffles Hotel Le Royal, the theme for this year’s discussion was financial inclusion, capital flows, and credit needs for rural development.

“The result from this discussion will be used as components and ideas for the National Bank of Cambodia and policy making bodies for the economies development,” Chea Chanto, the NBC’s governor, said in the opening speech of the seminar yesterday.

Heng Dyna, president of Cambodian Economic Association, who presented on capital flows in Cambodia, highlighted the need for causion when considering the trend of increased loan disbursements and increasing capital flows from abroad.

“Two-thirds of banks in Cambodia are foreign banks. So it shows that the presence of foreign banks means the high cash flow from foreign countries,” he said.

The risk with a build up of foreign flows, Dyna added, was that changes in fiscal policy in the country from which the money was coming could impact the Cambodian economy, which had no control over those decisions.

“I want to emphasis on the research community as a whole, and involved partners, as I want you to look at the amount of credit growth which comes out from foreign countries. Where the money comes from? And where it flows to? I think it is important information for all relevant institutions in order to judge and react on this.”

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choungeth's picture

Not because two-thirds of the banks are foreign banks and that means high cash inflows from abroad. There must be more thorough analysis on financial leverage of system as a whole. Ngeth Chou, Consultant at Emerging Markets Consulting (EMC).