[PHNOM PENH POST]
Members of the Kingdom’s financial community yesterday launched the
sector’s development strategy for the next decade, with
de-dollaris-ation, improved regulations and better crisis prevention
among the main goals.
The Financial Sector Development Strategy
(FSDS) 2011-2020, done by the Ministry of Economy and Finance and
National Bank of Cambodia with technical and financial support from the
Asian Development Bank, lays out key issues in the sector and offers
solutions for the coming 10 years.
National Bank of Cambodia
Governor Chea Chanto said the most recent FSDS aimed at developing an
effective, integral and competitive financial system in Cambodia.
“The
strategy will develop a sound, market-oriented finance sector that will
enhance resource mobilisation and allocation, and consequently support
sustainable economic growth,” he said.
Chea Chanto added the strategy would also “make finance more widely accessible and inclusive to overall poverty reduction.”
The
high dollarisation of the Cambodian economy, the domination of banks in
the financial industry and a general lack of market infrastructure are
as problems that continue to hamper the sector, according to the FSDS
report.
The report lists de-dollarisation as a long-term goal.
However, the FSDS outlines ways to increase use of the riel in the short
to medium-term, including pricing goods and services in the domestic
market in the currency. Also, the introduction of investment products
such as treasury bills was cited as a way to boost the prevalence of the
riel.
At the same time, the FSDS noted increased banking
supervision through regulator cooperation, the launch of an interbank
lending market to boost confidence in the sector and the establishment
of an early-warning system to prevent crises as key parts of development
of the sector going forward.
The report also offered plans for
the Kingdom’s nascent insurance and capital markets, and called for
still greater legal and regulatory reform.
Minister of Economy
and Finance Keat Chhon said yesterday that strong relationships among
both regulators and operators were vital to growing the domestic
financial industry.
He also said that Cambodia’s financial
sector over the past decade, especially the banking industry, had
withstood a hard hit from the global economic crisis.
“The
strategic plan will help to strengthen the capacity of the regulators
and all financial operators with codes of ethics and high
professionalism,” he said.
He added the FSDS follows closely ASEAN’s plan for economic integration by 2015.
ADB
Country Director Putu Kamayana said the strategy, and update from FSDS
2006-2015, provides “regulatory measures to ensure sound management of
the country’s financial sector in the next 10 years.”
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