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Last Updated : 2024-04-23 22:35:00
The Central Bank expects subdued commodity prices, concessions given in Budget 2015 such as VAT reduction to 11percent and stable inflation expectations would keep inflation at a benign level in the period ahead.According to the Central Bank, a healthy growth of credit disbursements to the private sector by commercial banks was observed for the second consecutive month in September 2014.
“Credit obtained by t he private sector from commercial banks increased by Rs.52.3 billion during the month of September, following an increase of Rs.47.7 billion in August. On a yoy basis, this was an acceleration of credit to 4.6 percent in September 2014 from 2.6 percent in the previous month,” the Central Bank said.However, credit growth in the first 9 months to September fell to 1.8 percent from 2 percent in the first 8 months to August.“The quarterly survey of commercial banks’ loans and advances to the private sector reflected substantial credit flows to the Industry and the Services sectors in the first three quarters of the year,” the Central Bank said.
The recently released interim performance of National Development Bank PLC recorded a 20 percent credit growth for t he nine months ended September to Rs.28.2 billion. Leading finance company LOLC saw its loan book expanding 41 percent.Meanwhile, the Central Bank said due to policy measures initiated by them, the impact of the contraction in pawning advances on private sector credit growth following the decline in international gold prices appears to have gradually diminished.
The Central Bank this May introduced a credit guarantee scheme to encourage gold-backed loans as the banks were seen shying away from loaning money on gold articles due to declining international gold prices, to prop up credit growth.The Central Bank has aimed for 14 percent private sector credit growth by end-2014 and 15 percent next year to spur economic growth to 7.8 percent this year and 8.2 percent in 2015.
During the first nine months up to September, net credit to the government from the banking sector has increased by Rs.87.3 billion while credit to public corporations has declined by Rs.1.2 billion.Net foreign assets (NFA) of the banking sector have increased by Rs.225.9 billion during this period.Broad money (M2b) grew by 12.8 percent yoy in September compared to 12.3 percent in the previous month, reflecting the expansion in bank credit obtained by the private and public sectors.
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