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Client Alert: NBC implements measures to ease impact of COVID-19 on the banking and finance sector

Client Alert: NBC implements measures to ease impact of COVID-19 on the banking and finance sector

March 13, 2020

The spread of the novel coronavirus is creating a global emergency situation and negatively impacting almost every country in the world, including Cambodia. In response to this viral pandemic, the Royal Government of Cambodia, as well as the National Bank of Cambodia (“NBC”) is taking immediate action to steer the economy through this very difficult period.

On 17 March 2020, the NBC released Announcement No. B13-020-002 regarding the following five measures it is taking to minimize the economic impact of the COVID-19 pandemic:

  1. Delay in requiring banking and financial institutions to meet the capital conservation buffer of 50%.
  2. Reduction of the minimum interest rate of liquidity-providing collateralized operations by 0.5% for all maturities.
  3. Reduction of the interest rate on negotiable certificate of deposit in Khmer Riel and US dollars within a reasonable limit.
  4. Reduction of the reserve requirement rate from 8% for Khmer Riel and 12.5% for foreign currency to 7% for both Khmer Riel and foreign currency for a period of six months starting from April 2020.
  5. Reduction of the liquidity coverage ratio within a reasonable limit.

If you have questions about this alert, please contact your usual VDB Loi adviser.

VDB Loi is a network of leading law and tax advisory firms with offices in Cambodia, Indonesia, Laos, Myanmar and Vietnam. We provide the highest quality solutions for transactions and taxation. Our general areas of practice are corporate, finance, licensing and disputes. Our principal specialized areas of practice are energy, infrastructure, real estate and construction, telecom, and taxation.

You can find more information on our Cambodia office here.

Phomra

Phomra Saray| Senior Associate
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