ECONOMYNEXT – Sri Lanka’s credit to private sector reached 134 billion rupees in August 2021, from 76 billion rupees a month earlier with credit to government rising 168.7 billion rupees amid currency trouble, data showed.
Credit to private sector from rupee banking system was 104 billion rupees in August.
Credit to private sector grew 15.1 percent from 14.3 percent a year earlier. In 2020 private credit slowed in the second quarter and started to pick up from around August after being negative up to July amid lockdowns.
Currency troubles pick up when printed money is used through the credit system.
Credit to government was up 48.2 percent in the 12-months to August up from 45.7 percent a year earlier.
Central bank credit (printed money) is now growing at triple digit rates. Central bank credit to government grew 187 percent in August to 1.54 trillion rupees up from 157.8 percent a month earlier.
Commercial bank credit to government grew 25 percent to 4.1 billion rupees.
Sri Lanka hiked rates in August by 50 basis points to 6.0 percent.