The principal mission of the National Bank of Cambodia is to determine and direct the monetary policy aimed at maintaining price stability in order to facilitate economic development, within the framework of the country’s economic and financial policy. Through prudent conduct of monetary policy, inflation has been managed at low rate with an annual average of less than 5 percent, which is appropriate for developing countries. However, in the context of a highly dollarized economy, the effective conduct of monetary policy is constrained and the National Bank of Cambodia loses its ability to act as the lender of last resort. Currently, the monetary policy instruments used to achieve price stability is setting reserve requirement rate and conducting foreign exchange intervention. At the same time, the National Bank of Cambodia is developing additional monetary policy instruments to enhance monetary policy effectiveness through issuing Negotiable Certificates of Deposit (NCDs), developing interbank and monetary markets, promoting the use of riel, and so on.