Cambodia faces risks from a credit boom, the IMF warns
The International Monetary Fund has warned that a credit boom in Cambodia poses a threat to economic growth. Banks have been cutting interest rates to win customers and private sector credit has increased by almost a third in the past 12 months, the fund said. This means that borrowing levels are now equal to 37% of the country’s total economic output, well above the median for most other low-income nations. A similar surge in 2008 saw a real-estate boom and bust, the fund warned. … The National Bank of Cambodia…recently raised the amount of money that banks need to hold in reserve, making it harder for them to access the cash needed to lend. However, the IMF said that raising the reserve requirement “does not automatically mean tighter credit conditions” and further steps were needed. …
