ECONOMYNEXT – Sri Lanka’s private credit grew by 59.2 billion rupees in October 2020, amid a resurgence of a Coronavirus crisis, lower than the 87.4 billion rupees in September, while government credit surged amid a foreign debt repayment, official data shows.
Private credit grew to 4,261 billion rupees in October, rising 6.4 percent from a year earlier, picking up from 4.8 percent in September.
In October credit to state enterprises declined 15.3 billion rupees, on top of a decline of 4.6 billion rupees a month earlier.
Sri Lanka rupee was stable up to the third quarter of 2020, with private credit contracting up to July 2020.
Credit to government surged 157 billion rupees to 735.2 billion rupees in October from 577.7 billion rupees a month earlier.
The surge was mostly due to the a sovereign bond that was repaid with central bank reserves which did not involve an increase in reserve money. In October some of the liquidity went down with a reserve outflow.
In October total credit from the banking system was 324 billion rupees, the highest since March 2020, when credit rose by 426 billion rupees and private credit surged 120 billion rupees amid a steep fall in the rupee. (Colombo/Dec02/2020)