Cambodia

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Cambodia's international reserves ticked up again in December to a four-month high of US$3.45bn, and are now back near the all-time high recorded in August. Our forecast is for reserves to end the year at US$3.87bn, and this latest trend clearly poses upside risks to our forecasts. The continued trade deficit is unlikely to be fully funded my capital inflows in 2012, however, and as such we see a slight drawdown in reserves and a weakening in the exchange rate to average KHR4,170/US$ this year, down from the current spot rate of KHR4,015/US$.