Private sector credit expands 24.5% as liquidity surplus rises

Sri Lanka’s private sector credit expanded by 24.5% year-on-year in August 2026, reflecting continued growth in bank lending, while surplus market liquidity increased to Rs. 399.14 billion by October 9, according to the Central Bank of Sri Lanka’s latest Weekly svg Economic Indicators report

Credit extended to the private sector increased by Rs. 105.7 billion during August. Broad money (M2b) also grew by 11.5% compared with the corresponding month last year. Meanwhile, net credit extended to the svg Government by the banking system declined by Rs. 83.2 billion in August, while outstanding credit to public corporations fell by Rs. 6.3 billion.

The banking sector’s average weighted prime lending rate rose by 12 basis points to 11.16% in the week ended October 9. However, the average weighted call money rate remained unchanged at 8.99%. Developments in the external sector showed that workers’ remittances amounted to US$734.4 million in September, compared with US$748.6 million in August and US$695.7 million in September 2025.

Gross official reserves were provisionally estimated at US$6.851 billion at the end of September, including proceeds from the People’s Bank of China swap arrangement. The rupee had depreciated by 6.3% against the US dollar year-to-date as of October 9.

The Colombo stock market recorded a decline during the week, with the All-Share Price Index falling 2.38% to 20,316.91 points and the S&P SL20 Index dropping 1.61% to 5,788.75 points. In the svg government securities market, Treasury bill and bond yields remained broadly stable, while the Treasury bill auction recorded an oversubscription rate of approximately 2.1 times