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Wednesday October 5th, 2022

Sri Lanka private credit negative in June 2022, Rs189bn printed

ECONOMYNEXT – Sri Lanka’s credit from commercial banks to private borrowers fell 21 billion rupees in June 2022 with dollar denominated loans falling, while 189 billion rupees had been printed by the central bank official data showed, as forex shortages continued to persist.

Credit to private sector from rupee banking units went by 16 billion rupees to 6,959 billion rupees, while dollar denominated loans fell from 794.6 billion rupees to 738.1 billion rupees.

Sri Lanka is facing steep inflation which requires more working capital for companies but investment spending is expected to fall with high interest rates.

Central Bank credit to government (printed money) rose 189.3 billion rupees to 3,094.1 billion rupees according to the way statistics are compiled.

Excess liquidity has build up in the banking system with some banks curtailing credit, while others are short.

Credit to state enterprises also fell to 1,729.1 billion rupees from 1,750.1 billion rupees.

Dollar denominated credit from banks to the government also fell from 482.3 billion rupees from 502.2 billion rupees. (Colombo/Aug01/2022)

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