NBC to Take Proactive Measures to Maintain Financial Stability

The National Bank of Cambodia launched its Financial Stability Review (FSR) 2023 on Monday, outlining Cambodia's financial system and proactive measures to ensure its continued stability. The review comes against a backdrop of significant global uncertainty. Geopolitical conflicts that may disrupt supply chains and lead to trade fragmentation, uncertainties surrounding China's troubled property sector, the impacts of climate change, and the threat of cyberattacks are among the major risks that could hinder global and regional economic growth. These risks could hinder Cambodia's economic growth, cause inflation and exchange rates to rise, and possibly put pressure on the quality of credit among high-leverage firms and households, according to the review. However, the review stated that Cambodia's banking sector has displayed remarkable resilience and continued to provide necessary funding to support post-pandemic recovery. Credit growth in the banking system reached US$57.6 billion last year, up only 4.8 percent from a year earlier, while deposits increased by a healthy 13.1 percent to US$47.9 billion in 2023, NBC report showed. NBC Governor H.E. Dr. Chea Serey emphasised the importance of the collaboration with relevant stakeholders in maintaining financial stability. 'The NBC remains committed to collaborating with all relevant stakeholders to closely monitor recent developments and emerging risks to economic and financial stability,' she said in the opening speech at a dissemination workshop on the occasion of the launch of the Financial Stability Report 2023 on Monday. The FSR 2023 serves as a key tool for the NBC to disseminate its analysis and assessments of Cambodia's economic and financial landscape, highlighting risks inherent in the financial sector, especially in the banking system, and proposing policy options to manage those risks, she said. The FSR 2023 will help stakeholders and the public identify potential threats to financial stability at an early stage, and foster joint efforts with the NBC to implement timely and appropriate measures, the central bank governor added. Cambodia currently has a total of 58 commercial banks, four MDIs, 83 (non-deposit taking) microfinance institutions, 9 specialised banks, 16 leasing institutions, and 114 rural credit institutions. Source: Agence Kampuchea Presse