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NBC implements third phase of COVID 19 debt relief measures

Cambodia’s central bank, the National Bank of Cambodia, has announced it will maintain the current reserve requirement ratio at 7% until further notice, and continue its loan restructuring scheme until December 31.

The measures are part of the central bank’s third phase of debt relief measures giving financial institutions more liquidity to assist the economy with more lending during the COVID 19 pandemic.

The measures will support the Royal Government’s policy in addressing the challenges of, and alleviating the burden for the people affected by COVID 19, the NBC stated.

Normally the minimum amount of cash that financial institutions must hold with the NBC is 12.5% in foreign currency (typically dollars) and 8% in the local riel currency, both these requirements were dropped to 7% in the NBCs first phase of debt relief measures in March last year.

The reserve requirement is traditionally one of the monetary policy instruments used by the National Bank of Cambodia to control the speed of credit growth.

Normally the NBC offers interest rates on the 4.5 percent of reserve requirement in foreign currency, while the remaining 8 percent is not offered interest. No interest is offered to the reserve requirement in riel.

Cambodia Investment Review has been informed the NBC is now offering no interest on the current 7% is holds of either currency.

In addition to extending the loan restructuring scheme until December 31, for customers who are living in the lockdown areas or restricted traveling areas the previous three-time limit has also been removed.

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