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Sri Lanka private credit subdued for second month in May

ECONOMYNEXT – Sri Lanka’s commercial banks loaned 30.9 billion rupees to private borrowers in May 2017, higher than the low of 18.9 billion in April, but sharply down from the 60 to 80 billion rupees seen during a recent balance of payments crisis, official data show.

Credit to government rose 33.4 billion rupees in May, and state corporations also borrowed 4.3 billion rupees.

Despite state borrowings, in May the central bank credit fell sharply from 477 billion rupees to 414 billion rupees, as the monetary authority bought dollars and sterilized excess cash.

Total credit from the banking system fell to 14.7 billion rupees in April from 123 billion in March. In May total credit was 68.6 billion rupees.

In May the central bank bought 148 million dollars from forex markets. Appreciation of the currency has been blocked.

In June 136 million dollars was bought, which analysts say points to subdued credit.

The data does not include government surrenders of dollars to the central bank. (Colombo/July31/2017)


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