May records decade’s highest inflation in Cambodia

[geovalin]

Inflation rose to 7.2 percent in May this year in the country, the highest in the last decade, the National Bank of Cambodia (NBC) said yesterday, adding that it has unleashed a set of measures to control the inflationary pressures and protect the purchasing power of the local currency. Increasing prices of oil and food mainly contributed to the sharp rise in inflation, said NBC Governor Chea Chanto at its biannual meeting yesterday.

 

The prolonging Russia-Ukraine war and sanctions on Russia have pushed up world oil and food prices, along with the prices of fertilizers and agricultural products, he said. China’s ‘Zero Covid Policy’ also led to a spike in the prices of construction materials in Cambodia as the country depends on Chinese imports. The NBC through its monetary policies is trying to control the inflationary pressures and support the economic recovery of the country, he added.

 

“As an immediate step, the exchange rate of riel against the US dollar has been stabilised,” he said. Due to the high dollarisation of the economy, exchange rate fluctuations can have a direct and rapid impact on inflation in Cambodia.

 

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