Original report from Phnom Penh
24 February 2009
Finance Minister Keat Chhon on Thursday urged commercial banks to expand their loans as a counter to the global economic slowdown, which has already lowered projected growth for the country.
“Banks have to play a role in helping the economy,” Keat Chhon told VOA Khmer. “Now the government has arranged for them to take a role by lowering the reserve requirements.”
In September 2008, the National Bank increased reserve requirements for commercial banks, from 8 percent to 16 percent, to help secure deposits. But Keat Chhon said that requirement will now be lowered to 12 percent.
Adjustments to the banking sector come amid a credit crisis in America that has led to a recession and global financial uncertainty.
In Cambodia, the crisis has hurt garment manufacturing, construction and tourism—three pillars of the economy—and the World Bank recently lowered its growth forecast for the country, to 4.9 percent, compared to a rate of 7 percent in 2008.
In Siphan, head of the credit division for Acleda Bank, said the decrease of reserve requirements will allow his bank to have more cash ready for credit and loans, from about $470 million in 2008 to $700 million in 2009.
“We have enough cash to lend,” he said. “We can provide any kind of credit, because we will increase our loans about $300 million.”
Other major banks like ANZ Royal, Cambodian Public and Japan Maruhan are committed to expanding their loans as well.
However, In Siphan said even with banks expanding their loans, only a limited number of investors is currently looking for credit.
Som Ganty, a financial expert at the Royal University of Law and Economics, said loan expansion by commercial banks would provide more cash flow for investors, which could help Cambodia escape the most serious impact of the financial crisis.
He suggests lowering the reserve rate even more, though, as local banks are not able to find capital from foreign banks.
“The reserve requirement should be as low as 8 percent, so the banks will be able to increase money lending,” he said.
Tal Nay Im, director of the National Bank, said the central bank has no plan to lower reserve requirements further. Commercial banks will have to find resources through foreign lenders to continue their operations, she said.
“Banks have to play a role in helping the economy,” Keat Chhon told VOA Khmer. “Now the government has arranged for them to take a role by lowering the reserve requirements.”
In September 2008, the National Bank increased reserve requirements for commercial banks, from 8 percent to 16 percent, to help secure deposits. But Keat Chhon said that requirement will now be lowered to 12 percent.
Adjustments to the banking sector come amid a credit crisis in America that has led to a recession and global financial uncertainty.
In Cambodia, the crisis has hurt garment manufacturing, construction and tourism—three pillars of the economy—and the World Bank recently lowered its growth forecast for the country, to 4.9 percent, compared to a rate of 7 percent in 2008.
In Siphan, head of the credit division for Acleda Bank, said the decrease of reserve requirements will allow his bank to have more cash ready for credit and loans, from about $470 million in 2008 to $700 million in 2009.
“We have enough cash to lend,” he said. “We can provide any kind of credit, because we will increase our loans about $300 million.”
Other major banks like ANZ Royal, Cambodian Public and Japan Maruhan are committed to expanding their loans as well.
However, In Siphan said even with banks expanding their loans, only a limited number of investors is currently looking for credit.
Som Ganty, a financial expert at the Royal University of Law and Economics, said loan expansion by commercial banks would provide more cash flow for investors, which could help Cambodia escape the most serious impact of the financial crisis.
He suggests lowering the reserve rate even more, though, as local banks are not able to find capital from foreign banks.
“The reserve requirement should be as low as 8 percent, so the banks will be able to increase money lending,” he said.
Tal Nay Im, director of the National Bank, said the central bank has no plan to lower reserve requirements further. Commercial banks will have to find resources through foreign lenders to continue their operations, she said.
1 comment:
If you voted for CPP (Cambodian People's Party):
Also known as:
Communist People's Party
Khmer Rouge People's Party
Khmer Krorhorm People's Party
You're support the killing of 1.7 million Khmer peoples.
You're support the killing of innocent men, women and children in Cambodia on March 30, 1997.
You're support murder of Piseth Pilika.
You're support assassination of journalists in Cambodia.
You're support political assassination and killing.
You're support attemted assassination and murder of leader of the free trade union in Cambodia.
You're support corruption in Cambodia.
You're support Hun Sen Regime burn poor people's house down to the ground and leave them homeless.
These are the Trade Mark of Hun Sen Regime.
Hun Sen, Chea Sim and Heng Samrin are Khmer Rouge commanders.
When is the ECCC going to bring these three criminals to U.N. Khmer Rouge Trail?
Khmer Rouge Regime is a genocide organization.
Hun Sen Regime is a terrorist organization.
Hun Sen Bodyguards is a terrorist organization.
Hun Sen Death Squad is a terrorist organization.
Cambodian People's Party is a terrorist organization.
I have declare the current Cambodian government which is lead by the Cambodian People's Party as a terrorist organization.
Whoever associate with the current Cambodian government are associate with a terrorist organization.
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