The Cambodian and German central banks on February 27 affirmed their willingness to work together to increase cooperation, which private sector insiders have hailed as a noteworthy and encouraging step toward promoting and facilitating business and tourism exchanges between the two countries, as well as with additional European markets.

The plan was raised during a bilateral meeting between National Bank of Cambodia (NBC) governor Chea Chanto and Deutsche Bundesbank board member Burkhard Balz at the NBC headquarters, the Kingdom’s central bank said in a statement.

Chanto briefed Balz on Cambodia’s gradual economic recovery following major challenges stemming from the Covid-19 crisis, the Russia-Ukraine conflict, and inflation, the statement said.

Balz hailed the NBC’s Bakong – a blockchain-based payment system infrastructure officially launched in October 2020 – and affirmed that the Bundesbank will keep working to strengthen and expand cooperation with Cambodia and the region post-Covid-19.

This appears to be consistent with Berlin’s “Zeitenwende”, a fundamental shift in foreign and security policy.

According to the statement, Balz added that the Bundesbank will also step up payment-system collaboration with the NBC, especially when an upcoming European system is established. This was most likely a reference to the “new pan-European payment solution” sought by the European Central Bank- (ECB) backed European Payments Initiative (EPI).

Speaking to The Post on March 2, Cambodia Post Bank CEO Toch Chaochek underscored the modernity of the German financial and banking system, especially in the digital realm, and stated that cooperation between the two countries in the area would have a positive impact on the Kingdom.

“Germany has one of the most prosperous banking systems in Europe. Thus, collaboration between the two central banks will enable experience and knowledge sharing in the field of payment systems, especially digital, which will lead to broader and stronger cooperation between our countries, as bilateral trade and business relations grow,” he said.

Germany has been one of Cambodia’s major development partners over the last three decades, having promised the largest number of grants amongst all EU states. It provided a total of $720 million in cooperative financing to Cambodia from 1992 to the end of 2021, including $70 million in concessional loans and $650 million in grants.

On February 23, The NBC announced that it entered into two separate memorandums of understanding (MoU) with the Central Bank of the Solomon Islands (CBSI) and Reserve Bank of Fiji (RBF) to strengthen “Cooperation in the Area of Financial Innovation and Payment Systems”.