Monday Nov 09, 2026
Monday Nov 09, 2026
Monday, 9 November 2026 05:38 - - {{hitsCtrl.values.hits}}
Private sector borrowing from Sri Lanka’s banking system rebounded in September from August’s four-month low, though annual growth slowed for a third consecutive month.
This is according to Central Bank of Sri Lanka (CBSL) data released last Friday. Net credit expanded Rs. 212.4 billion month-on-month (MoM), provisional CBSL data showed. Outstanding credit to the private sector rose to Rs. 11.77 trillion from Rs. 11.56 trillion in August, while year-on-year (YoY) growth eased to 23.6% from 24.5%.
The September increase was nonetheless 6.4% below the Rs. 226.8 billion added in September 2025, the second consecutive month in which monthly borrowing ran below the year-earlier level. Annual growth has now decelerated for three straight months, from 26.4% in July. Since June 2025, monthly additions have ranged from Rs. 83 billion in January to Rs. 263 billion in November 2025, with a trough of Rs. 101 billion in April.
Lending by Domestic Banking Units (DBUs), which handle rupee business, rose Rs. 171.8 billion to Rs. 11.17 trillion, up from Rs. 138.7 billion in August, though YoY growth eased to 25% from 26.6%. Credit from Offshore Banking Units (OBUs), which handle banks’ foreign currency business, added Rs. 40.6 billion to Rs. 597.9 billion, reversing August’s Rs. 33.1 billion contraction. OBU credit stood 2.1% above the year-earlier level, down from 6.5% growth in August.
Net credit to the Government from the banking system fell Rs. 84.8 billion to Rs. 7.65 trillion, with the YoY contraction little changed at 7.6% from 7.7%. The decline was split between the two lender groups, in contrast to August when it came entirely from the CBSL. Net CBSL credit to the Government fell Rs. 32.8 billion to Rs. 1.4 trillion, a 22.1% YoY contraction, while commercial bank credit fell Rs. 52 billion to Rs. 6.25 trillion.
Outstanding credit to public corporations and State-Owned Business Enterprises (SOBEs) declined Rs. 16.9 billion to Rs. 462.9 billion, widening the YoY contraction to 24% from 22.3%.
Net foreign assets (NFA) of the banking system, its foreign assets minus foreign liabilities, fell Rs. 41.9 billion to Rs. 1.63 trillion, the first monthly decline in the series since the start of the year. Commercial banks’ Net Foreign Assets (NFA) dropped Rs. 82.2 billion to Rs. 515.4 billion, offsetting a Rs. 40.3 billion rise in the CBSL’s NFA to Rs. 1.12 trillion. YoY growth in system NFA slowed to 69.2% from 67.5%. Net domestic assets rose Rs. 90.6 billion to Rs. 15.56 trillion, with YoY growth easing to 7.3% from 7.6%.
On monetary aggregates, reserve money, the cash base banks hold with the CBSL, rose Rs. 39 billion to Rs. 1.95 trillion, and YoY growth accelerated to 15.2% from 11.8%. M1, the narrowest measure of money covering currency and demand deposits, fell Rs. 33.8 billion to Rs. 2.36 trillion, with YoY growth easing to 11.2% from 12.6%. M2 rose Rs. 53.9 billion to Rs. 15.09 trillion and M2b, the broadest measure, rose Rs. 48.7 billion to Rs. 17.19 trillion, with YoY growth easing to 10.6% and 11.1%, respectively.
