External Drivers of Credit Cycles in Cambodia

Selected Issues Papers, January 8, 2026

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External Drivers of Credit Cycles in Cambodia

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Bibliographic details

• Authors: Natasha X Che
• Published: January 8, 2026
• Series: Selected Issues Papers
• DOI: https://doi.org/10.5089/9798229034708.018

Main findings

• Common global and regional factors explain over 60 percent of credit growth variance in Cambodia.
• Cambodia exhibits one of Asia’s highest sensitivities to external conditions.
• External shocks—including US monetary policy, global risk sentiment, and China’s growth—transmit primarily through a common global credit channel rather than direct bilateral linkages.
• Cambodia’s high exposure to the global financial cycle is amplified by a highly dollarized economy.

Methodology

• The paper uses a dynamic factor model to investigate the external drivers of Cambodia’s credit cycles.

Key statistics and publication metadata

• Pages: 13
• Volume: 2026
• Issue: 002
• Series: Selected Issues Paper No. 2026/002
• DOI: https://doi.org/10.5089/9798229034708.018
• Stock No: SIPEA2026002
• ISBN: 9798229034708
• ISSN: 2958-7875
• Author: Natasha X Che
• Publication date: January 8, 2026

Policy implications and recommendations

• The high exposure to the global financial cycle highlights the necessity of macroprudential policies to manage domestic volatility in Cambodia’s highly dollarized economy.

External Drivers of Credit Cycles in Cambodia — Selected Issues Papers (Natasha X Che, January 8, 2026)

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