10 Jul 2019
The National Bank of Cambodia and the Bank of Korea yesterday agreed to cooperate in a study on the development of the interbank market in Cambodia.
This would be the fourth research cooperation between the central banks of Cambodia and Korea, and is part of Bank of Korea’s Knowledge Partnership Program.
NBC director-general Chea Serey said the study aims to find ways of promoting the growth of the local interbank market and making it more efficient, which, she said, will help stabilise the financial sector in the Kingdom.
“We want to study this new instrument and how to get more banks to join it,” she said, adding that the research will take four months and that work on it begins immediately.
She said the research also aims to find ways of using excess liquidity in the banking system more efficiently.
NBC has been encouraging lending between banks, but the system still faces some serious challenges, the Central Bank’s chief said.
“The global financial situation is constantly changing, so we must adapt to this and constantly improve,” she added.
The first collaboration between the central banks was in 2016 and focused on modeling for macroeconomic analysis and inflation forecasting in Cambodia. The second looked at the empirical analysis of the relationship between exchange rate and inflation in the Cambodian economy.
These two joint research programs have contributed substantially to enhancing monetary policy to achieve price stability as well as sustainable economic growth, according to insiders.
Last year’s research tackled macro-financial linkages, looking at the spillovers from the real economy to the financial sector and vice versa.
Kee-Sun Jang, deputy director general of the Knowledge Partnership Program, said the banks have developed a special relationship since they signed a memorandum of understanding on cooperation in 2017.
Neav Chanthana, NBC deputy governor, said the collaboration will help develop the research skills of NBC’s staff and help them attain other skills related to collecting and analysing data that will allow them to make better policy recommendations.