COLOMBO (EconomyNext) – Sri Lanka vehicle registrations hit a historic new high of 66,664 up 147 percent from a year earlier, with 2 and 3 wheeler registrations doubling from a year earlier, analysis of vehicle registry data shows.
JB Securities, an equities brokerage in Colombo said in an analysis that motor cycle registration hit 42,221 in March, up from 163 percent from 15,997 and also sharply up from the 25,155 levels seen earlier.
Three wheelers which are mostly used as taxis were up 104 percent from a year earlier to 12,347. In February 2015 only 7,994 vehicles were registered.
JB Securities said motor cycle registration were probably driven up cut price bikes given to policemen but it was less clear why three wheeler taxi registrations were going up.
Motor car registrations were up rose 245 percent from a year earlier to 5,856 unit in March led by hybrids.
The financing share of cars were 56.7 percent, 2-wheelers 41 percent and three wheelers 92 percent, according to JB Securities data.
Sri Lanka’s interest rates are now at three decade lows and analysts who are watching credit and liquidity trends have warned that higher government consumption was pushing domestic demand up and higher interest rates were needed to correct the imbalance.
Fuel prices are also low pushing down vehicle operating costs.
Motor car and other vehicle registration are now at levels higher than seen before February 2012, when a balance of payments crisis force interest rates to be pushed up.
Sri Lanka’s central bank however loosened monetary policy on April 15, cutting policy rates by 50 basis points despite loose fiscal policy.
The Central Bank has also been engaging in type of ‘quantity easing’ by steadily releasing temporarily sterilized excess liquidity, which have disappearing through the balance of payments at alarming speed.