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Figures reveal inflation increase

CAMBODIA’S prices were 7 percent higher at the end of June compared to the month in 2010, according to National Institute of Statistics official Sim Ly yesterday.

Although the organisation was still preparing to release the official figures, Sim Ly said the figures would also show  a month-on-month increase from May to June of about half a percent.

“It’s not too bad [a level] for us,” he said, “It’s just seasonal effects.”

The increase in Cambodia’s prices was caused mainly by increases in oil and food costs globally, he said. Some experts said they were concerned particularly about possible food inflation in the Kingdom.

“I have concern on the fluctuation of food prices in Cambodia, which is strongly affected by the moving international food price, especially the rice price,” wrote Suzuki Hiroshi, CEO and Chief Economist at the Business Research Institute for Cambodia.

Although Cambodia has limited means with which to control inflation, given the prevalence of the dollar among other factors, authorities ought to work to maintain a consistent exchange rate between the riel and the dollar, he said.

“If the riel depreciates against the US dollar, it will invite a further high inflation rate,” he said.

Earlier this month, the National Bank of Cambodia had met to discuss raising the reserve requirement rate from 12 to 16 percent, but left it unchanged. The International Monetary Fund has predicted average inflation of 6.5 percent for Cambodia this year.

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