Logo of Phnom Penh Post newspaper Phnom Penh Post - Bank reserve requirements doubled

Bank reserve requirements doubled

Bank reserve requirements doubled

Cambodia has doubled reserve requirements for private banks from 8.0 to 16 percent in a bid to curb money supply to stem rising inflation, officials said May 7.

The requirements will take effect from July this year, said Phan Ho, director of banking supervision at the National Bank of Cambodia, adding that the government had already informed private banks in the Kingdom.

“The measure is important to reduce so much cash circulation,” he said. “Now our GDP (gross domestic product) has increased too high, too fast. We want it to slow down because when the growth jumps too high, it is not good,” Phan Ho added.

The new reserve requirement will only affect foreign currency deposits, he said.

Cambodia’s economy has averaged 11 percent growth over the past three years, but inflation has also soared.

It cracked into double digits late last year, hovering around 11 percent, driving up the cost of food and other staple goods.

In Channy, the president of ACLEDA Bank Plc., said the measure would limit business activities.

“Now more than 8.0 percent of the money will not be used for lending,” he said. “The more lending there is, the more investment and more income for the country, as well as generating more jobs and maintaining the economic growth.”

He said the government should increase reserve requirements gradually.

MOST VIEWED

  • Ethnic group ‘disappointed’ to be denied French visas to attend court

    Eleven people at the centre of a case involving seven indigenous Bunong villages in Mondulkiri province pursuing legal action in France have expressed disappointment after the French embassy in Phnom Penh denied their visa applications to attend court. A press release said the 11 included a

  • Cambodia nabs 12th place in best retirement destinations

    Cambodia is an expatriate hotspot for those dreaming of living a more luxurious lifestyle at an affordable cost, according to International Living’s Annual Global Retirement Index 2019. For the fourth year in a row, Cambodia took the top spot in the Cost of Living category.

  • EU starts EBA withdrawal

    The EU on Monday announced that it has begun the 18-month process of withdrawing the Kingdom’s access to its preferential Everything But Arms (EBA) agreement over “a deterioration of democracy [and] respect for human rights”. However, the Garment Manufacturers Association of Cambodia (GMAC) said

  • PM: War result of foreign meddling

    Prime Minister Hun Sen said on Sunday that Cambodia’s recent history of conflict was caused by foreign interference. “The wars that happened were caused by provocation, incitement, support, smearing and interference from foreign powers, and the group of ignorant people who pushed Cambodia to