Private Sector Net Borrowing Reaches LKR 65 Trillion
Posted 28,June

By Chaveendra Dunuwille

In Local News

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With a further LKR 331 billion the total borrowing by the private sector has reached an astonishing total of LKR 65 trillion in the first five months of 2021.  March alone saw the borrowing of over LKR 112 billion. 

While cooperates were highly successful in the first 3 months of 2021 this would not last as the third wave of Co-vid 19 referred now as the ‘Avurudu Cluster’ emerged. Resulting from the human interactions in the Sinhala and Tamil New year this was by far the worst wave as the number of infected was around 148  000 bringing the total no of Co-vid 19 cases to 243,787.  

The credit demand as a result showed a drop in April and May. Analysts presented mixed opinions with regards to the borrowing of the private sector.  While some consider this to be an aberration there are also those who interpret the borrowing as a sign of improvement in the local economy.  

The accommodative monetary policy and high level of rupee liquidity has been  implemented by the government to enable economic recovery by providing  affordable credit to productive sectors of the economy 

The net borrowing of the government had risen by 10.4% or LKR 476 billion in the first five months of 2021. At the same time the borrowing by public corporations rose by LKR 110 billion or 11%.