By: Staff Writer
Colombo (LNW): Net credit to the Government from the banking sector swelled by half a trillion in April 2023 pushing the outstanding amount to cross the Rs. 8 trillion mark.
As per provisional data released by the Central Bank, the Government borrowed Rs. 523 billion in April whilst total outstanding as at end April was Rs. 8,091 billion. As at end 2022, the outstanding value was Rs. 7,471 billion.
Last week the Central Bank said net credit to the Government by the banking system that notably expanded in 2022 is expected to moderate with the receipt of substantial foreign financing to the Government.
Outstanding credit to public corporations saw a massive decline of Rs. 463.0 billion in April to Rs. 1,130 billion. As at end 2022, the figure amounted to Rs. 1,734 billion.
The CBSL said credit to the State Owned Business Enterprises (SOBEs) by the banking system is expected to reduce significantly in the period ahead, underpinned by the cost recovery pricing adopted by major SOBEs.
Outstanding short term domestic debt stock significantly increased by 35.9 percent to Rs.4,267.7 billion at the end of 2022 from Rs. 3,139.8 billion at the end of 2021 due to the significantly enhanced Treasury bills stock by 81.2 percent, to Rs. 4,113.9 billion by end 2022, compared to Rs. 2,270.5 billion recorded at the end of 2021.
The share of short-term debt in total domestic debt stock increased slightly to 28.4 percent by the end of 2022 from 28.3 percent reported at the end of 2021. Furthermore, the share of Treasury Bills in total domestic debt stock increased to 27.4 percent at the end of 2022from 20.5 percent at the end of 2021.
The medium and long term domestic debt stock increased by 24.2 percent to Rs. 9,882.1 billion by the end of 2022 from Rs. 7,957.4billion recorded at the end of 2021.
However, the share of medium and long term debt in the total domestic debt stock further declined to 65.7 percent in 2022 from 71.7 percent at the end of 2021 due to the continued dependency on short term instruments for deficit financing in 2022 than medium and long term financing.
The share of Treasury Bonds of the total outstanding domestic debt stock declined to 57.9 percent at the end of 2022 from 62.8 percent at the end of 2021.The banking sector debt increased by 62.5percent to Rs. 8,525.7 billion at the end of 2022 from Rs. 5,247.9 billion in 2021 due to the increased debt to commercial banks and the Central Bank. Meanwhile, non-bank sector debt also increased by 27.8 percent to Rs. 6,164.1.
