The year-on-year growth of broad money (M2b) continued to expand at a high rate of 17.0 per cent in October 2015 compared to 16.0 per cent recorded in the previous month, driven by the expansion of credit extended to both private and public sectors by the banking system. Amongst contributory factors, credit granted to the private sector by commercial banks increased by 26.3 per cent, year-on-year, compared to 22.2 per cent in the previous month. Tentative data for November 2015 also shows that credit flows to the private sector continue to expand at a high rate. Meanwhile, excess liquidity in the domestic money market continues to remain high, fuelling monetary expansion.
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Monetary Policy Review - December 2015
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External Sector Performance - October 2015
Sri Lanka’s external sector reflected a modest performance in the month of October 2015 with lower trade deficit, continued growth in tourist earnings and a moderate increase in workers’ remittances. Despite the slowdown in imports during the recent months, the cumulative trade deficit as at end October 2015 increased by 2.5 per cent mainly due to the subdued export performance as a result of depressed global demand. As at end October 2015, gross official reserves stood at US dollars 6.5 billion, and increased to US dollars 7.3 billion in November 2015 with the receipt of the proceeds of the 9th international sovereign bond issuance and other currency inflows.
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Central Bank opens its Regional Office in Nuwara Eliya
The Central Bank of Sri Lanka will commence operations at its Regional Office in Nuwara Eliya on 17 January 2016 to further expand its regional presence to promote financial inclusion and to facilitate economic activities in the region. The Nuwara Eliya Regional Office is to be declared open by Mr. Arjuna Mahendran, the Governor of the Central Bank of Sri Lanka, with the participation of the senior management of the Central Bank and senior officials of commercial banks and government institutions.
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Inflation in December 2015
Inflation, as measured by the change in the National Consumer Price Index (NCPI) (2013=100), which is compiled by the Department of Census and Statistics, decreased to 4.2 per cent in December 2015 from 4.8 per cent in November 2015, on an year-on-year basis. Inflation on an annual average basis in December 2015 was 3.8 per cent.
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Monetary Policy Review - January 2016
Broad money supply (M2b) continued to expand at a high rate with a year-on-year growth of 17.2 per cent in November 2015, following the growth of 17.0 per cent in the previous month. In November 2015, the net foreign assets (NFA) of the banking sector improved with the receipt of the proceeds of the International Sovereign Bond (ISB) of US dollars 1.5 billion issued on 27 October 2015. The issuance of the ISB also facilitated a reduction of net credit obtained by the government (NCG) from the banking sector during the month of November, while credit obtained by public corporations also declined. Meanwhile, credit extended to the private sector by commercial banks remained the key driver of broad money growth, recording an increase of 27.0 per cent (year-on-year) in November 2015, compared to the growth of 26.3 per cent in October.
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Appointment of a New Deputy Governor
The Monetary Board, with the concurrence of the Hon. Minister of Finance, has promoted Assistant Governor, Mr. S Lankathilake to the post of Deputy Governor of the Central Bank of Sri Lanka (CBSL) with effect from 24th January 2016.
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External Sector Performance - November 2018
The deficit in the trade account narrowed significantly in November 2018 (year-on-year) following the noteworthy decline in the import expenditure.
Exports grew by 4.1 per cent while imports contracted by 9.1 per cent in November 2018 (year-on-year).
Earnings from tourism rebounded strongly with the start of the tourism season registering a growth of 18.2 per cent in November (year-on-year). Tourism sector is expected to continue its robust performance through 2019.
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Foreign Investment Threshold in Treasury Bills and Treasury Bonds
The Monetary Board of Central Bank of Sri Lanka has decided to reduce the threshold of foreign investments in Treasury Bills and Treasury Bonds from 10 per cent to 5 per cent out of the total outstanding stock of Treasury Bills and Treasury Bonds with effect from 18.01.2019.
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Econ-Icon Season IV Written Examination - District Winners
The Communications Department of the Central Bank of Sri Lanka, together with the Regional Offices of the Central Bank, conducted the written examination to select the 16 best school teams (in each medium, i.e. Sinhala and Tamil), for the contest ‘Econ Icon - Season IV’, the TV quiz programme, which will take place in 2019. The examination was held simultaneously at selected centres island-wide on 22nd January 2019 where teams of A/L students from schools in each District participated. Given below are the names of schools whose teams were placed first in the respective District.
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Inflation in December 2018
Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100) decreased to 0.4 per cent in December 2018 from 1.0 per cent in November 2018. The decrease observed in year-on-year inflation in December 2018 is driven by the decrease of prices of items in both Food and Non-food categories. Year-on-year Food inflation decreased to -4.5 per cent in December 2018 from -3.9 per cent in November 2018 while year-on-year Non-food inflation also decreased from 5.2 per cent in November 2018 to 4.7 per cent in December 2018.
The change in the NCPI measured on an annual average basis decreased to 2.1 per cent in December 2018 from 2.7 per cent in November 2018.