Further information about Instruments
| Instrument | Facility Type | Role | Purpose | Key Features |
|---|---|---|---|---|
Liquidity-Providing Collateralized Operations LPCO |
Short-Term Repo | Reference Rate | Provide short-term & structural liquidity |
|
Negotiable Certificate of Deposit NCD |
Central Bank Bills | Floor Rate | Absorb excess liquidity |
|
Marginal Lending Facility MLF |
Standing Lending Facility | Ceiling Rate | Provide immediate liquidity on demand |
|
Outright Purchase & Sales of Gov't Bonds OMO |
Secondary Market Bond Trading | Fine-Tuning | Liquidity management & complement key instruments |
|
Reserve Requirement RR |
Mandatory Reserves | Structural | Support monetary & prudential objectives |
|
Foreign Exchange Spot Intervention FX Spot |
FX Spot Purchase/Sales | FX Stability | Maintain orderly FX market conditions |
|
FX Forward & Swap Operations FX Fwd/Swap In Progress |
Derivative FX Transactions | Fine-Tuning | Manage FX liquidity & short-term mismatches |
|
The LPCO is a repurchase agreement used by the NBC to provide liquidity to financial institutions in Khmer Riel, facilitating liquidity management and promoting KHR usage. Financial institutions may use NCD, Government securities, or Current Account balances at the NBC as collateral.
| Transaction type | Repurchase agreement (repo) |
| Currency | KHR |
| Tenor | 7 days · 91 days · 182 days |
| Mechanism | Auction — Single-price Dutch, competitive bids |
| Minimum bid | KHR 200,000,000 |
| Auction schedule | Every Thursday (except public holidays) |
| Participants | NBCP members with signed Repo Master Agreement |
| Settlement | Same day (T+0) via KHR current accountAfter NBC receives eligible collateral |
| Eligible collateral | NCD · Government bonds · Current account balance |
| Haircut | KHR collateral: 0% · USD collateral: 3% |
| Interest rate | Determined by Monetary Policy Committee |
The NCD is a standardised central bank bill issued by the NBC to absorb excess liquidity from the banking system. NCDs are traded in secondary markets and are highly liquid, making them a low-risk asset for private financial institutions. They can also serve as collateral for LPCO, MLF, and overdraft transactions with the NBC.
| Transaction type | Central bank bill (issuance) |
| Currency | KHR and USD |
| Tenor — KHR | 1 week · 3 months · 6 months · 1 year |
| Tenor — USD | 3 months · 6 months · 1 year |
| Value per unit | KHR 1,000,000 · USD 1,000 |
| Mechanism | Single-price Dutch auction, competitive bids |
| Auction schedule | Every Thursday (except public holidays) |
| Participants | NBCP members with signed Securities Transaction Agreement |
| Settlement | Same day (T+0) at 1:45 PM via trading account |
| Interest rate | Announced weekly by Auction Committee |
The MLF is an on-demand facility that provides short-term KHR liquidity to financial institutions at a fixed rate with overnight maturity (extendable upon request). Because institutions can always borrow from the NBC at the MLF rate, this rate functions as a hard ceiling for interbank money market rates.
| Transaction type | Standing facility (on-demand) |
| Currency | KHR |
| Maturity | Overnight (1 day) · Rollover available upon request |
| Mechanism | On-demand via NBCP (MLF module) |
| Minimum amount | No minimum |
| Maximum amount | Based on eligible collateral value |
| Participants | NBCP members with signed Repo Master Agreement |
| Interest rate | Fixed — decided by Monetary Policy Committee |
| Eligible collateral | NCD · Government bonds (G-Bond) |
| Haircut | KHR collateral: 0% · USD collateral: 2% |
The NBC conducts open market operations by buying or selling government bonds with market participants in the secondary market. OMO is used as a fine-tuning instrument to complement key weekly instruments and help meet operational liquidity objectives on a day-to-day basis. Currently, only securities with a remaining maturity of under 90 days are eligible.
| Transaction type | Outright buy / outright sell |
| Eligible securities | Government bonds with remaining maturity <90 days |
| Frequency | As needed, day-to-day |
| Platform | National Bank of Cambodia Platform (NBCP) |
| Role | Fine-tuning complement to LPCO and NCD auctions |
Reserve requirements oblige financial institutions to hold a specified portion of their deposits as reserves at the NBC. They serve both monetary policy and prudential purposes — influencing banks' lending and funding behavior over the medium term.
| Type | Mandatory reserves held at NBC |
| Framework | Averaging — flexibility within maintenance period |
| Currency focus | KHR (supports riel usage) |
| Adjustment frequency | Infrequent — structural decisions only |
| Impact | Medium-term lending capacity and funding behaviour |
| Dual purpose | Monetary policy & prudential objectives |
The NBC may conduct FX interventions by buying or selling foreign currency to address excessive exchange rate volatility or disorderly market conditions. FX spot operations directly affect KHR liquidity in the banking system and are used selectively — not as a routine substitute for the NBC's weekly liquidity management tools.
| Transaction type | FX spot purchase or sale of KHR |
| Trigger | Excessive volatility or disorderly FX market conditions |
| Effect on liquidity | Directly affects KHR liquidity in banking system |
| Frequency | Selective — not routine |
| Objective | Exchange rate stability & macro prudential support |
| Substitution | Not a substitute for weekly NCD/LPCO operations |
FX interventions are tools of last resort for maintaining orderly market conditions. They are not designed to target a specific exchange rate level or to replace the NBC's standard weekly liquidity management operations.
The NBC is preparing FX forward and swap instruments to manage short-term foreign currency liquidity and smooth temporary imbalances. These instruments involve agreed exchanges of currencies at predetermined dates and rates — intended for liquidity management purposes, not as exchange-rate guarantees.
| FX Forward | Fixes an exchange rate and amount for future settlement |
| FX Swap | Combines a spot leg with a forward leg |
| Purpose | FX liquidity management & short-term currency mismatch smoothing |
| Not intended for | Exchange-rate level guarantees |
| Obligations | Predetermined bilateral — known at inception |
| Status | Being prepared for implementation |
These instruments are currently being developed and are not yet available to market participants. Updates will be communicated via the NBC's official publications.
| Collateral Type | LPCO | MLF | Haircut (KHR) | Haircut (USD) |
|---|---|---|---|---|
| Negotiable Certificate of Deposit (NCD) | ✓ | ✓ | 0% | 3% (LPCO) · 2% (MLF) |
| Government Bonds (G-Bond) | ✓ | ✓ | 0% | 3% (LPCO) · 2% (MLF) |
| Current Account Balance at NBC | ✓ | ✗ | 0% | — |