Net credit to government from banking system increased by Rs. 212.5 bn in December 2021

During the period from January to November 2021, government revenue increased to Rs. 1,322.0 bn compared to Rs. 1,259.1 bn recorded in the corresponding period of 2020, and during the same period, overall budget deficit increased to Rs. 1,709.3 bn compared to Rs. 1,576.4, according to Weekly Economic Indicators of the Central Bank of Sri Lanka issued on Friday.

“Net Credit to the Government from the banking system increased by Rs. 212.5 bn in December 2021”, it said.

The report further said:

By 18th February 2022, the All Share Price Index (ASPI) decreased by 2.61 per cent to 12,134.04 points and the S&P SL 20 Index decreased by 1.87 per cent to 4,140.65 points, compared to the index values of last week.

During the year up to 18th February 2022, the Sri Lankan rupee depreciated against the US dollar by 0.8 per cent.

Given the cross currency exchange rate movements, the Sri Lankan rupee depreciated against the pound sterling by 1.6 per cent, the

Euro by 1.3 per cent and the Japanese yen by 0.7 per cent while appreciating against the Indian rupee by 0.01 per cent during this period.

The reserve money decreased compared to the previous week mainly due to the decrease in deposits held by the commercial banks with the Central Bank.

Purchasing Managers’ Indices for both Manufacturing and Services activities expanded in January 2022 as well recording 58.7 and 57.5 index values respectively.

The total outstanding market liquidity was a deficit of Rs. 693.539 bn by end of this week, compared to a deficit of Rs. 617.991 bn by the end of last week.

During the period from January to November 2021, total expenditure and net lending increased to Rs.3,033.4 bn compared to Rs. 2,838.5 bn recorded in the corresponding period of 2020.

During the period from January to November 2021, domestic financing decreased to Rs. 1,812.3 bn compared to Rs. 1,822.8 bn in the corresponding period of 2020.

Foreign financing recorded a net repayment of Rs. 103.1 bn during the period from January to November 2021 compared to a net repayment of Rs. 246.2 bn recorded in the corresponding period of 2020.

Outstanding central government debt increased to Rs. 17,413.7 bn by end November 2021 from Rs. 15,117.2 bn as at end 2020.

Since end 2020, total outstanding domestic debt increased by 20.4 per cent to Rs. 10,914.9 bn, and the rupee value of total outstanding foreign debt increased by 7.4 per cent to Rs. 6,498.8 bn by end November 2021.

During the period under review (12.02.2022 to 18.02.2022), crude oil prices showed a mixed performance. At the beginning of the week, prices increased notably as markets feared that geopolitical tensions between Russia and Ukraine may worsen the already tight status of crude oil supplies. However, prices declined towards the end of the week on prospects of progress on the Iran nuclear deal unlocking more crude supplies. Overall, Brent and WTI prices decreased by US dollars 3.22 per barrel and US dollars 3.34 per barrel respectively, during the period.

Weekly AWPR for the week ending 18th February 2022 increased by 23 bps to 9.09 per cent compared to the previous week.

Broad money (M2b) expanded by 13.2 per cent, on a Y-o-Y basis, in December 2021.

Outstanding credit to public corporations increased by Rs. 3.4 bn in December 2021.

Outstanding credit extended to the private sector increased by Rs. 61.3 bn in December 2021.