Monday, August 10 2026
Monday, August 10 2026
MONETABRIEF – Sri Lanka's private credit expanded 245 billon rupees in June 2026, continuing a momentum seen before the latest currency collapse, while credit to government fell 65 billion rupees, as tax collections improved.
Private credit was up 27.4 percent over the 12 months to 11.281.5 billion rupees, from 27.8 percent a month earlier.
The value of credit from overseas banking units rose to 579.2 billion rupees from 563.8 billion, for which the monetary depreciation may have contributed.
Credit to government from commercial bank fell to 6,303 billion rupees from 6,368 billion rupees.
Credit to state enterprises rose only 16.1 billion to 509.6 billion rupees from 493.5 billion rupees.
The political authorities market fuel and electricity quickly, matching expanded external pressure by killing domestic demand very fast reducing the need to get new credit as fuel prices rose.
Credit to state enterprises rose 16.1 billion rupees to 509 billion rupees was in any case lower than the contraction in state credit, raising questions about claims of an 'external shock.'
When the rupee collapsed in March and April as the central bank denied convertibility to excess liquidity in money markets under 'exchange rate as the first line of defence' escaping accountability for their own note-issue when oil prices rose, credit to state enterprises fell.
Credit to government from banks has also fallen, shattering narratives pushed by macro-economists who cut rates and injected liquidity that budget deficits were to blame for inflation and external troubles.
Sri Lanka macro-economists busted the rupee amid a budget surplus in 2026, shattering their past claims.
Rates have since been corrected.
After depreciating the rupee taking cover under 'exchange rate as the first like of defence' monetary authorities have blocked appreciation as foreign investors bought rupee bonds in July and August, showing a clear depreciation and inflation bias, critics say. (Colombo/Aug09/2026)
| Sterling | 458.31 | Sell - |
| 3 month bill | 9.95 | 0.18 ▼ |
| 12-m bill | 10.20% | 0 - |
| Gold | $4035 | - - |
Comments
Be the first person to comment and join the debate