Big Bills

The Central Bank rapped state Petroleum Corporation and the Electricity Board for mounting debts of over Rs. 2 bn a month, warning that a growing public sector credit bill could not be tolerated. The Central Bank rapped state Petroleum Corporation and the Electricity Board for mounting debts of over Rs. 2 bn a month, warning that a growing public sector credit bill could not be tolerated. Monetary aggregates have been growing at higher than expected, the Bank said in its monthly monetary policy review, largely due to expanded credit to the private and public sectors.

“A major contributory factor for the public sector credit expansion has been the losses incurred by the Ceylon Electricity Board and the Ceylon Petroleum Corporation, which will continue to incur losses amounting to about Rs. 2.5 bn per month, unless corrective measures are taken,” the Central Bank said in a statement on Wednesday.

The Bank’s Monetary Board warned that it was vital high monetary and credit growth be arrested to ease inflationary pressures building up.

“Furthermore, the adjustment of administered prices of fuel, electricity and transport, enabling a reduction in the borrowings of public corporations, w