Aug 08, 2011 (LBO) – Sri Lanka’s credit to business from commercial banks rose 34.4 percent to 1,793.4 billion rupees in June with banks disbursing 39 billion rupees of loans during the month, while credit to the state also spiked sharply. Banks have given 33.1 billion rupees of loans denominated in rupees and 6.0 billion rupee equivalent from their foreign currency units, according to central bank data.
Over the past 12 months banks have loaned 434.5 billion rupees to the private sector and 209.2 billion during the past six months.
In June credit to government also spiked sharply. Credit to the state from commercial bank spiked to a record 30.6 billion rupees from a month earlier.
Monthly credit volumes which fell to 25.9 billion rupees in April from 40 billion in February have now rebounded to the same levels.
In July excess reserves in banks were also drawn down rapidly, indicating high loan growth either to the private sector or the state, which is then hitting the balance of payments.
Sri Lanka sold a billion dollar sovereign bond later in the month.