Sri Lanka’s private credit expanded in 60 billion rupees in July 2024, on top of a 74 billion rise in June, official data show, while credit to state enterprises fell.
Banks loaned 82.7 billion rupees to the government in July (these include interest roll-overs which are effectively paper transactions) outside of central bank credit.
Central bank credit was a negative 19.8 billion rupees, making credit to government from the banking system as a whole 62.9 billion rupees.
In May and June 2024, central bank credit was shown as steeply negative based on the way data is reported, but large volumes of excess liquidity from dollar purchases remained unsterilized, putting pressure on the rupee as they were turned into credit.
