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Sri Lanka plans household debt survey

Jan 05, 2018 16:41 PM GMT+0530 | 0 Comment(s)

ECONOMYNEXT – A country-wide assessment of household indebtedness is to be carried out in Sri Lanka amid concern over rising debt levels, according to Central Bank Governor Indrajit Coomaraswamy.

The central bank, over the next few years, will continue to strengthen the institutional framework for macroprudential surveillance, he said presenting a road map for monetary policy in 2018.

This will be through analysing liquidity and interest rate gaps and multicurrency foreign exchange risks, monitoring leverage of financial institutions, and enhancing credit risk assessments of the financial sector.

Coomaraswamy said central bank macroprudential surveillance to constantly monitor developments in the broader economy and assess their impact on the overall financial stability of the country had highlighted issues such as excessive lending for non-productive sectors.

“Accordingly, over the next few years, we will continue to strengthen the institutional framework for macroprudential surveillance through analysing liquidity and interest rate gaps and multicurrency foreign exchange risks, monitoring leverage of financial institutions, and enhancing credit risk assessments of the financial sector.”

“As part of our macro prudential surveillance, a systemic risk survey is being conducted on a biannual basis to identify systemic risks to the domestic financial system.Stress tests are to be developed for Licensed Finance Companies LFCs. In addition, a country-wide assessment of household indebtedness is to be carried out.”

Coomaraswamy had said earlier rising household debt levels were causing concern, including a rising in personal loans. 
(COLOMBO, January 05, 2018)

 


 

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