ECONOMYNEXT – Sri Lanka’s private credit from rupee banking units of commercial banks expanded 22.9 billion rupees in February 2024, after contracting 65.8 billion rupees in January, official data showed.
Private credit along with US dollar denominated loans grew only 7.3 billion rupees to 7,321.5 billion rupees, with dollar denominated loans contracting to 529.6 billion rupees from 545.2 billion rupees amid rupee appreciation.
With the appreciation of the rupee reducing stock holding costs of importers and other producers, working capital credit requirement could also fall giving more ‘bang for buck.’
Central bank credit contracted 121 billion rupees in February, after contracting 91 billion rupees in January 2024, keeping the balance of payments in surplus.
Credit to government from commercial banks went up by around 100 billion rupees to 6,153.4 billion rupees in February, but overall credit from the banking system was down amid the central bank credit contraction.
Reserve money, as measured, also fell by 74 billion rupees to 1,413.7 billion rupees. (Colombo/Apr15/2024)