- Published on Wednesday, 13 June 2012 16:01
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The policy measures adopted by the Central Bank and the government during the period February to April 2012 to curtail the growth of credit, reduce import demand and thereby stabilise the external sector have begun to have an effect on the relevant variables This is stated by the Central Bank of Sri Lanka issuing a press release today.
It further states that the increase in private sector credit in absolute terms in April 2012 was only Rs. 18.7 billion, significantly lower than the average monthly growth of Rs. 51.8 billion in the first quarter 2012 and Rs. 27.4 billion in April 2011. Meanwhile, market interest rates, which had increased substantially so far in 2012 as a result of tight monetary conditions, have started to stabilise in recent weeks.
The release further reveals that the cumulative trade data for the first four months of 2012 indicate that imports are decelerating at a rapid pace in line with the policy measures adopted. However,
notwithstanding the incentives provided for exports as a result of the policy measures, exports too have declined year-on-year, due to global developments. Nevertheless, the depreciation of the exchange rate is expected to support export competitiveness, while further curtailing import expenditure, thereby significantly reducing the trade deficit in 2012.