Friday, 20 February 2009

Central bank denies banking instability

The Phnom Penh Post

Written by Nguon Sovan
Friday, 20 February 2009

THE National Bank of Cambodia (NBC) said Thursday that the Kingdom is not exposed to the global credit crunch. Speaking at the Banking Cambodia conference that kicked off Thursday, Neav Chanthana, deputy governor at the central bank, said that the Cambodian banking sector remained in a healthy state.

"The National Bank of Cambodia is very pleased ... to inform the public that our banking sector has had no direct exposure to the global subprime mortgage crisis ... [the bank] is committed to supervising all necessary areas [of the sector]," Neav Chanthana said.

Finance Ministry Secretary General Hang Chuon Naron said at the International Business Forum this week that nonperforming loans remain low.

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Our banking sector has had no direct exposure to the global sub-prime mortgage crisis.
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The government's reassurances come after the International Monetary Fund (IMF) warned in a report last week that "the global financial crisis has exposed vulnerabilities among Cambodia's banks and is beginning to affect their financial soundness".

It added: "The NBC has to increase surveillance of the banking sector."

The central bank said it had recently introduced a host of measures designed to better supervise the sector, including internal and external auditing, increased credit information sharing and improved classification of assets.

Neav Chanthana said it was time for Cambodian banking to modernise further "in order to integrate into global markets". She added that Cambodia's banking sector would discuss ways to maintain strong growth - part of the function of the two-day Banking Cambodia meeting - and forecasted the economy overall would expand by five percent in 2009. Prime Minister Hun Sen this month predicted six percent growth, the highest forecast to date.

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