Logo of Phnom Penh Post newspaper Phnom Penh Post - New NBC policies to promote liquidity

New NBC policies to promote liquidity

Content image - Phnom Penh Post
National Bank of Cambodia director-general Chea Serey said the capital conservative buffer is an addition to three measures taken earlier this month to open access to credit. NBC

New NBC policies to promote liquidity

Cambodia's Central Bank on Thursday issued a capital conservative buffer to ensure liquidity and promote lending amid the outbreak of Covid-19.

Speaking to the media via teleconference on Tuesday, National Bank of Cambodia (NBC) director-general Chea Serey said the capital conservative buffer is an addition to three measures taken earlier this month to open access to credit.

In early March, NBC said the requirement for financial institutions to reserve at least 50 per cent of their capital will be delayed until late 2021.

The Central Bank also reduced the interest rate on the liquidity-providing collateralised operation (LPCO), a financial tool that allows NBC to lend to financial institutions in the local currency.

LPCO’s interest rate has been cut to 2.5 per cent a year (from three per cent); 2.3 per cent for six months (from 2.8 per cent), and 2.1 per cent for three months (from 2.6 per cent).

The last measure announced by NBC this month is the deduction of the interest rate on the negotiated certificate deposit (NCD), a tool that allows the financial sector to deposit with NBC to earn interest.

“The purpose of these policies is to support economic growth as the country faces the Covid-19 threat. NBC continues to closely monitor the development of the situation inside and outside Cambodia,” she said.

Serey said the Central Bank has already met with the Cambodia Microfinance Association and the Association of Banks in Cambodia to find ways of aiding the sector.

“We decided to implement these measures to promote liquidity in the economy to help businesses. We want financial institutions to continue lending,” she said.

Microfinance Institution Prasac’s vice-president Say Sony supported the measures.

“I think these policies are beneficial to the banking sector. We will continue lending to businesses that need liquidity,” said Sony.

On March 5, NBC encouraged banks and money-deposit taking institution (MDIs) to continue disbursing loans and possibly suspend interest for businesses impacted by the Covid-19 outbreak, especially in the tourism industry.

Watch video:

MOST VIEWED

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Rise in planned flights lifts travel hopes

    Six airlines have applied to resume flights in December, while two others have put in for additional flights and routes, according to State Secretariat of Civil Aviation (SSCA) head Mao Havannall on November 29. These account for 43 new weekly domestic and international flights in December, up 16

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Hun Sen: Manet to be candidate for prime minister

    Prime Minister Hun Sen has reaffirmed that his oldest son Hun Manet will be his successor as Prime Minister if he is elected. Speaking during the inauguration of a new sewage treatment facility in Preah Sihanouk province on December 2, Hun Sen said Manet will be

  • More Cambodians studying in US

    The number of Cambodian students studying at US colleges and universities in 2020-21 increased by 14.3 per cent over the previous year despite the Covid-19 pandemic, according to a recent US government report. The 2021 Open Doors report on International Educational Exchange showed that 848 Cambodian students studied