National Bank of Cambodia (NBC) was
established in December 23, 1954. After the country gained the
independence from French Colony and after the Indochina Printing
Institution was closed.
Its principal duty is to determine and direct the monetary policy
aimed at maintaining price stability. Since the Cambodian economy is
currently highly dollarized, the Central Bank is not in a position to
play its role of lender-of-last-resort and to implement efficient
monetary policy instruments regarding national currency. However,
dollarization presents some advantages:
- It constitutes an incentive to attract foreign direct investments;
- Dollarization leads to stability and induces an effectively fixed exchange rate; and dollarization has reduced the harmful effects streaming from the financial crisis in Asia.
The other main duties of the Central Bank are:
- To formulate, implement and monitor exchange rate policy. It is a market based exchange rate policy in the framework of a liberal exchange system; and
- To license and supervise banks and financial institutions
The most important role of NBC, was the establishing of local banking system in which the state banks and private banks operated together in the territory of Cambodia. www.nbc.org.kh
