Sri Lanka loan demand up in second quarter
COLOMBO – Sri Lanka’s demand for loans from banks continued to increase in the second quarter of 2024, backed by lower interest rates and exchange rate stability, a central bank survey showed.
Loan demand had increased in retail, corporate and small and medium enterprise sectors, while demand from state enterprises had reduced.
The outlook for the fourth quarter was also positive.
“Reduced interest rates, economic growth, improvements in the business environment, relatively stable exchange rates and expansions in economic activities mainly attributed to the observed increase in demand,” the central bank said in a statement.
“In 2024 Q3, the expected increase in demand will primarily be driven by anticipated further reductions in interest rates, policy consistency, expectations on continued growth in the economy, stabilization of foreign exchange rates, and recovery in key economic sectors,” the statement said, adding that the expected increase in demand observed in the SOE sector during 2024 Q3 may be due to expectations of commencing new projects related to sustainable and renewable energy.
The central bank has maintained monetary stability since late 2022, keeping the exchange rate stable and inflation around 2%, the level seen in stable countries to which people from Sri Lanka migrate to, giving a chance for people to recover their lost economic footing.
-economynext.com
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