Sri Lanka bank credit fall from peak in February

Apr 23, 2012 (LBO) – Sri Lanka’s commercial banks loaned 55.3 billion rupees to private business in February 2012 higher than in January and state credit also remained strong but eased from records volumes a month earlier, official data showed. The data also contains the effects of currency depreciation after authorities allowed the rupee to fall to match underlying loose monetary conditions and the results of sterilized sales of foreign exchange monetary authority.

High credit growth and sterilized sales had put pressure on Sri Lanka’s currency peg which has fallen from 109 to 130 levels over the past year.

In February authorities also raised energy prices, which were driving credit to the state in the form of lost petroleum taxes, and direct borrowings by state enterprises.

Credit to business rose 55.3 billion rupees to 2,105.7 billion rupees higher than the 44.50 billion rupees seen in January showing a 12 month growth of 34.4 percent in February from 34.3 percent in January.

Loans in domestic currency rose 46.50 billion rupees to 1,917.10 billion and loans denominated in dollars rose 8.90 billion to 188.6 billion rupees. The rupee also depr