Financial Dollarization: Evidence from a Survey on Branches of Cambodian Financial Institutions

We conducted a survey on Cambodian financial institutions and collected financial data at bank- and branch-level, in order to reveal the actual situation of dollarization in Cambodian financial institutions. We found that there were differences in shares of FX currency deposit and loans between commercial banks (CBs) and microfinance institutions (MFIs). MFIs are likely to have more local currency in their cash on hand, loans, deposits, and borrowings, while CBs rely mostly on FX currency in intermediation. Furthermore, although it is subtle, it can be observed that the share of local currency in deposits has increased over the period of 2009-2013 in the cases both of CBs and MFIs. It might suggest that there is the potential that local currency deposits can be facilitated. However, commercial banks did not allocate KHR funds, although they had large excess KHR funds in Phnom Penh. Moreover, FX currency shares in MFIs' loans have been increasing despite the increase of KHR currency in their deposits. Finally, we found that there were regional differences in dollarization of deposits and loans. In particular, branches in rural areas tend to extend more local currency loans than in Phnom Penh area.

Graduate School of Economics, Hitotsubashi University

2016-10

English(eng)

technical report

VoR

21

Discussion papers / Graduate School of Economics, Hitotsubashi University

https://hdl.handle.net/10086/28157