National bank of Cambodia-NBC- reduced commercial banks’ minimum reserve requirement from 16 percent to 12 percent after the central bank tripled it for all commercial banks on Sep 19, 2008 in order to curb the increase of inflation and tighten and strengthen Cambodian banks which is remarkably increasing in the last decade.
To increase the bank reserve requirement affected the bank sector and loan limitation of real estate market. And then all Cambodian developers and banks repeatedly appealed to the government to cut down restriction on bank lending to the property sector.
Tal Nay Im, NBC’s director general, said that reserve was increased in June because central bank was vigilant over the crisis and to prevent inflation. Right now, inflation is falling, so the central bank lowered it to give banks easy cash to provide more loan to their customers.
The latest figures indicate that Cambodia has 630,000 commercial accounts holders and about 670,000 clients of microfinance lending organizations, adding around 10 percent or 1.3 million people, can borrow money from the banking system, said she.
The Inflation rocketed to 25.1 percent in the first half of 2008 and dropped to 13.46 percent in December. Cambodia’s economic growth was up double digit during 2005-2007. 2009 growth would be projected 6.5 percent and inflation would drop to 10 percent, according to the National Institute of Statistics of Ministry of Planning,