Sri Lanka credit to business positive in March; state borrowings surge

(From L-R) Hussain Sadique –Chairman, SLRA / Group Director, Hameedia, Mano Tittawella –Senior Advisor, Ministry of Finance & Media, Ajith Amarasekera- Director, SLRA / CEO Swarnamahal, Leonard Michael Perera, Founder Convenor & Head of Business, SLRA Dinesh Perera-Director, SLRA / Deputy Director, Abans

June 06, 2014 (LBO) – Sri Lanka’s loans to business expanded 7.6 billion rupees in March 2014, ending two months of contraction, while borrowings by the central government surged, official data showed. Sri Lanka’s fiscal transparency had major setback from the first quarter of last year after the state stopped releasing month revenue and expenditure numbers, a practice that had been followed by successive administrations for years.

Fiscal data had been earlier published in via a monthly economic dataset released by the Central Bank.

State enterprises however repaid a net 9.8 billion rupees to the banking system, softening the overall pressure from the state on the banking system.

The banking system remains liquid, mostly from central bank purchases foreign inflows, with outflows reduced by muted credit growth, despite occasional surges in state borrowings.

Credit to private businesses and individuals rose 7.6 billion rupees to 2,498 billion rupees, with loans from domestic units rising 15.3 billion rupees while there was a net repayment of 7.8 million rupee equivalent to the dollarized banking sector.

Sri Lanka’s credit stock to private borrowers contracted as banks reduced the