The National Bank of Cambodia (NBC) announced it will introduce 10 core policies to support sustainable economic growth and recovery of the Kingdom in 2022.
Chea Chanto, Governor of the National Bank of Cambodia said at the NBC Annual Meeting said that together with the Cambodian government, a strategic framework and programs to promote economic growth in line with the possible impact of COVID-19, will hopefully revitalise and strengthen the economy reported the Khmer Times.
NBC claims that the national economy will grow by 5 per cent in 2022 while inflation is projected at 2.6 per cent. The World Bank estimates the nation’s GDP to grow 4.5 per cent in 2022 and 5.5 per cent in 2023.
What are the ten NBC Policies for 2022?
- Stabilising the exchange rate: Stabilising the exchange rate will continue to contribute significantly to stabilising prices and protecting the purchasing power of the riel, as well as the income of the people. The exchange rate in 2022 will continue to be under pressure due to the implementation of support measures that releases money into the market, combined with the uptrend of the US dollar, especially due to expectations of normalization of the future monetary policy of the US Federal Reserve.
- Promoting the use of the riel: The COVID-19 crisis demonstrates the incomplete role of monetary policy in supporting the Cambodian economy, such as the possibility of lowering interest rates to stimulate investment or consumption due to the high level of dollarisation. Promoting the use of the riel continues to be a top priority in strengthening the efficiency, sovereignty and independence of monetary policy, in order to actively support the process of economic recovery and resilience.
- Implement targeted support measures: Due to the economic recovery of different sectors, the implementation of support measures will be targeted to support their growth. In this sense, the banking system will contribute to the recovery of priority sectors by easing appropriate regulations and depending on the level of risk.
- Improving the financial environment and knowledge: Currently, access to affordable financial services is still limited, which is an obstacle to contributing to the development of small and medium enterprises, which are the backbone of the economy.
- All branches of the National Bank of Cambodia: in the provincial capitals, these must continue to support the economic growth of the region through the provision of active and efficient cash management services and contribute to the promotion of financial literacy and customer protection through the hotline system and provide information and help solve problems related to the use of financial services to citizens.
- Take advantage of new financial technologies: New financial technologies, especially in payment systems, have the potential to enhance the integrated financial environment, support growth and the digital economy by reducing fees and transaction costs, access to services everywhere with digital technology on a regular basis.
- Strengthening the Business Sustainability Plan and the Implementation Plan for the End: The uncertainty surrounding the pandemic underscores the need for both plans to maintain sustainable service delivery and risk management in the banking system. In order to contribute to the resilience of the entire banking system, all departments and units and institutions under the NBC are requested to continue to strengthen their business sustainability and action plans by updating the situation.
- Strengthening the effectiveness of anti-money laundering and terrorist financing: Improving Cambodia’s ranking on anti-money laundering and terrorist financing requires the involvement of all stakeholders. At the same time, the Financial Intelligence Unit of Cambodia must continue to raise the awareness of the reporting persons and relevant authorities, strengthen the monitoring and analysis of financial reports, send suspicious transactions to the competent authorities, and strengthen cooperation with relevant ministries and institutions and international partners to exchange information in a timely manner and situation.
- Contribution to climate change mitigation: In addition to fulfilling its core responsibilities, the banking system must also continue to contribute to the sustainable development of the financial sector, taking into account the environment and the impact on the climate. The International Monetary Fund (IMF) has recently adopted the NBC as a model central bank in the region, as it has invested in international reserves on green assets and set out the sustainable financing principles of the Cambodian banking system and encourage all banking and financial institutions to provide credit to sectors that help protect the environment and reduce climate change.
- As the chair of ASEAN in Cambodia in 2022: the NBC will contribute to strengthening regional financial integration and financial safety net through the liberalisation of banking services, integration of payment systems, promotion of the use of regional currencies and financing mechanisms for crisis prevention and resolution.
These points are taken from the Khmer Times, there is no update or version of this on the NBC website at the time of publishing.