The government should be ready to issue bonds by the end of June, he said. An International Monetary Fund expert will come to Cambodia at the end of the month to discuss the bond proposal, he said. Financial experts have questioned the prudence of issuing bonds to raise capital something Cambodia has never done. The government will be asking people to buy bonds for the bank with the promise of a higher return than a savings account. It has not been determine if or how the bonds will be guaranteed.
Experts say there are many questions to be settled before issuing bonds.
There needs to be a legal framework to regulate the financial instrument and the market. How to determine interest rates and target buyers are other issues to be resolved. Senaka Fernando, country manager of PriceWaterhouseCoopers, said the government also needs to boost Cambodians' trust in the country s banking and financial system. The many years of civil unrest, he said, destroyed the banking system and people's faith along with it. Cambodia talked about issuing bonds once before, but a draft of the securities law did not materialize, said Bit Seanglim, vice president for the Council of Ministers economic, social and cultural observer unit.