Reserve Hike Worrying For Economic Activity

June 2008 | Economic Analysis

Cambodia's government has decided to double the reserve requirement for private banks in a bid to reduce cash flow in the economy and tame inflation, as domestic prices continue to head sharply higher amid soaring food and fuel prices and a weak US dollar. However, the aggressive tightening of monetary conditions threatens to impact sharply on economic growth as reduced bank lending risks strangling domestic investment.

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