Commercial banks and microfinance institutions have acquired more than 209 billion riel in riel liquidity, worth $52.4 million, from the National Bank of Cambodia (NBC) since the central bank began its liquidity-providing collateralised operation (LPCO) in October 2016.
The LPCO aims to boost the country’s riel liquidity.
Until March 20 this year, the NBC says it has released liquidity in riel via the LPCO to 25 financial institutions at an average three percent interest rate.
It said the maturity or repayment period is one year from the date of signature of the loan.
According to the trend of demand of the last three years, the NBC expects that the demand for riel (KHR) from banks and money changers to increase about seven percent compared with last year.
The market KHR demand might increase to about 4000 billion riel ($1 billion), according to NBC.
Last week, the NBC created two additional maturities for LPCO of three months and six months.
Maturity refers to the period from the date of signature of the loan to the last payment of the principal. Maturity is the sum of grace and repayment periods.
NBC director-general Chea Serey said yesterday that the creation of two additional maturities for the LPCO was implemented in accordance with an action plan to diversify the maturities of the liquidity operation.
“For more than a year now, through NBC conduct of the LPCO (the first LPCO was in October 2016) and our survey’s results with banks and MFIs, we have learned that several financial institutions need different maturities, while a few others are lacking short-term liquidity and some others may need longer-term liquidity,” Ms Serey said.
“Therefore, to meet these different maturities needs, but also to allow the NBC to better absorb and reallocate the liquidity, the NBC decided to introduce two new maturities in addition to the current one.”
