Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post

Latest topics

» MARKET RISE - GUARANTEED
by Yahapalanaya Yesterday at 6:24 pm

» #PM Crisis#
by Yahapalanaya Yesterday at 6:16 pm

» ##FUN TOONS###
by ruwan326 Yesterday at 8:22 am

» Maldives also Now facing Sri Lanka’s Same Debt Trap Syndrome
by Miss-Sangeetha Yesterday at 8:01 am

» Financial Reports Q-3 2018
by ruwan326 Mon Nov 19, 2018 7:47 pm

» DIVIDEND ANNOUNCEMENTS- OCT/NOV
by ruwan326 Mon Nov 19, 2018 7:43 pm

» Daily Foreign Transactions
by ruwan326 Mon Nov 19, 2018 7:41 pm

» KEEP AN CLOSE EYE ON BFN DONT SELL BELOW 17
by kalu351 Mon Nov 19, 2018 7:05 pm

» Don't put your money on risk ! Buy politically less effect shares !!!!
by The Hunter Mon Nov 19, 2018 12:55 pm

» what is the best price for TKYO
by Pahan Mon Nov 19, 2018 11:11 am

» Is HNB price is attractive
by Pahan Mon Nov 19, 2018 10:57 am

» BFN DEAL -DONT SELL BFN AT 14 LEVEL
by kalu351 Mon Nov 19, 2018 10:45 am

» BFN Deal to go on in spite of the political crisis
by kalu351 Mon Nov 19, 2018 8:36 am

» TBs worth Rs.14.2 bn issued to SriLankan in 2012
by ruwan326 Sun Nov 18, 2018 6:42 am

» SRI LANKA @ 2020
by ruwan326 Sat Nov 17, 2018 7:24 am

» Dealing by directors
by ruwan326 Fri Nov 16, 2018 9:08 pm

» Summary of Key Announcements during the week
by ruwan326 Fri Nov 16, 2018 9:06 pm

» CSE WEEKLY
by ruwan326 Fri Nov 16, 2018 9:02 pm

» BFN Price HOLDING ON AS THE DEAL COME CLOSER
by sanjulanka Fri Nov 16, 2018 1:29 pm

» Another Finance sector deal UBC UBC UBC Deal
by kalu351 Fri Nov 16, 2018 10:56 am

» BFN BFN BFN BFN BFN DEAL ......WITH CHINESE BANK
by kalu351 Fri Nov 16, 2018 10:54 am

» MARKET CRASH - GUARANTEED
by Maharaja Fri Nov 16, 2018 9:32 am

» Q-TO-Q Financial Report-Financial Performance- Period ended 30 September 2018
by ruwan326 Thu Nov 15, 2018 9:00 pm

» CB raises key rates in surprise move to support currency
by Miss-Sangeetha Thu Nov 15, 2018 4:59 pm

» President rejects NCM brought against PM, Govt.
by ranferdi Thu Nov 15, 2018 2:36 pm

» Supreme Court issues stay order on Gazette dissolving Parliament
by THUWA Wed Nov 14, 2018 5:28 pm

» CSE THIS WEEK
by ruwan326 Wed Nov 14, 2018 8:27 am

» Veterans return to lead state banks
by ruwan326 Wed Nov 14, 2018 8:21 am

» Collect ODEL Range Rs. 23-25 .......Target Price over Rs.35
by soileconomy Tue Nov 13, 2018 8:54 pm

» අනං## මනං ##
by ruwan326 Tue Nov 13, 2018 8:52 pm

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » Higher private credit growth upsets Central Bank

Higher private credit growth upsets Central Bank

Go down  Message [Page 1 of 1]

PrasannaMani

avatar
Manager - Equity Analytics
Manager - Equity Analytics
[size=32]Higher private credit growth upsets Central Bank[/size]



The growth in private sector credit has upset the Central Bank as the recent numbers available up to October showed a disturbingly higher credit growth as the state-owned lenders remained stubborn although the private lenders showed some responsiveness to the monetary tightening measures. 
October private credit reached Rs.79 billion, the second highest for the year, and the total private credit granted during the first 10 months peaked to Rs.594 billion. 
According to Central Bank Governor Dr. Indrajit Coomaraswamy, although the private banks have shown some deceleration in granting credit, the state banks remained less sensitive as there have been large disbursements from the state sector lenders despite the higher rates and tight liquidity. 
“Clearly (this is) something we need to watch,” Dr. Coomaraswamy told the reporters when queried about the higher private sector credit.
However, he said the Central Bank’s provisional data showed the rate of credit growth is decelerating. 
“If you separate private banks and state banks, we can see that the private banks have responded to the tightening of monetary policy. But the state banks sometimes tend to be less sensitive to the changes in interest rates.”
He attributed this to the untidy monetary policy transmission in Sri Lanka. 
Generally it takes between 12 to 18 months for the full transmission of the monetary policy into the real economy in Sri Lanka, fairly longer than in some other developed markets. 
Sri Lanka is gradually replacing the current monetary targeting framework with flexible inflation targeting framework to achieve price stability, though partly in response to the International Monetary Fund (IMF) conditions.
The IMF in December asked the authorities to stand ready to raise the key rates if the private credit doesn’t show any deceleration. 
In October, the private sector credit growth decelerated to 22 percent on a year-on-year basis but on an absolute basis it spiked. 
The IMF and Central Bank want to bring down this growth to less than 20 percent levels but economists doubt if the monetary authority could meet its target. 
Sri Lanka’s private sector, particularly individual borrowers of late, have shown some insensitiveness towards higher rates as they have continued to borrow even at relatively higher rates for both consumption and investment.

- See more at: http://www.dailymirror.lk/article/Higher-private-credit-growth-upsets-Central-Bank-121943.html#sthash.NCpdGUwx.dpuf

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum