July 29, 2013 (LBO) – Sri Lanka’s loans to private business picked up in May as credit to both state enterprises and the central government from banks dropped in May, official data showed. Total credit to the state dropped 6.2 billion rupees to 1555.6 billion rupees in May from a month earlier, which included an increase in central bank credit of 5.2 billion rupees to 1,222.4 billion rupees.
Total credit to the private business and individuals rose 18.3 billion rupees to 2,421.5 billion rupees.
Forex borrowings, which are also affected by valuation changes dropped to the equivalent of 138.1 billion rupees from 141.6 billion rupees.
In the first four months of the year the state severely crowded out private business borrowing cash from banks and keeping lending rates high as the budget deficit deteriorated.
State energy enterprises, which were also borrowing heavily benefitted from better rainfall, which increases hydro power generation. An electricity price hike and easing international oil prices are also helpi