T

HE second monthly bulletin of the National Bank of Cambodia covering February

1994 is upbeat about most economic indicators.

Inflation as measured by

the consumer price index showed a sharp downward trend, with price increases

standing at just 0.88 percent during the month. According to the report, that

small increase was largely due to a hike in the cost of electricity. But the

rate is significantly less than even that in January of 2.23 percent.

The rate of increase in money supply is also down to 7.5 percent from

January's 8.5 percent.

The riel remained fairly stable against the

dollar through February, with the official exchange rate appreciating marginally

by 0.4 per-cent to 2470 riel to the dollar. This was reflected in gold prices

which declined by about 4 percent to 112, 900 riel per chi of gold.

The

report is also optimistic about the position of foreign exchange reserves, which

have recorded an increase of 11.4 billion riel in February and now stand at

321.9 billion riel. But this 4 per cent increase is not as high as the 19 per

cent gain recorded the previous month.

Credit to the Royal government

increased by about 7.2 billion riel. But credit to the private sector has

reduced about 6.9 per cent from 181.94 billion riel in January to 169.4 billion.

The report says, "viewed in the context of the sharp 12.6 per cent

increase in January... the level of credit still remains significantly higher

than the December 1993 level."