Outstanding credit extended to private sector declined by Rs. 107.6 bn

Weekly Average Weighted Prime Lending Rate (AWPR) for the week ending 12th May 2023 was increased by 48 bps to 21.32 per cent compared to the previous week while net credit to the government from the banking system increased by Rs. 97.2 bn in March 2023, according to Weekly Economic Indicators of the Central Bank of Sri Lanka.

Further according to the data, Broad money (M2b) expanded by 6.2 per cent, on a year-on-year basis, in March 2023. Outstanding credit to public corporations declined by Rs. 118.9 bn in March 2023.Outstanding credit extended to the private sector declined by Rs. 107.6 bn in March 2023.

The reserve money increased compared to the previous week mainly due to the increase in the deposits held by the commercial banks with the Central Bank.The total outstanding market liquidity was a deficit of Rs. 57.593 bn by 12th May 2023, compared to a deficit of Rs. 32.372 bn by the end of last week.

Meanwhile, Index of Industrial Production (IIP) in March 2023 decreased by 15.8 per cent to 90.9 compared to March 2022, mainly contributed by the decreases reported in the manufacture of Wearing apparel (-33.2 per cent), Food products (-1.5 per cent) and Other non-metallic mineral products (-22.8 per cent).

During the year up to 12th May 2023, the Sri Lankan rupee appreciated against the US dollar by 15.8 per cent. Given the cross currency exchange rate movements, the Sri Lankan rupee appreciated against the Japanese yen by 17.5 per cent, the pound sterling by 11.4 per cent, the Euro by 12.9 per cent and the Indian rupee by 14.8 per cent during this period.