Business

According to the latest Central Bank reports, Sri Lanka's loans from commercial banks fell to 14.5 billion rupees in August 2012 from 35.7 billion rupees a month year as state borrowings from the banking system surged to 35.0 billion rupees, official data shows. Also, credit to the private sector rose 28.7 percent to 2,285.1 billion rupees in the 12 months ending August slowing from 31.6 percent a month earlier.

Central bank credit to government (printed money) rose 231 percent in August to 316.5 billion rupees up from 205.7 percent a month earlier.

Sri Lanka and other Asian countries, such as India and Indonesia, are at risk of credit ratings downgrades because of the European sovereign debt crisis, Fitch Ratings warned last week. The European crisis was the “single biggest” external issue that may affect the ratings, Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told the media.

Of these countries, Sri Lanka was “most at risk” from any disruption to global funding markets because of its high external borrowing needs and weak balance sheet, he said. According to projections, Sri Lanka’s gross external financing requirements this year equal 95 percent of the country’s foreign reserves.

Central Bank Governor Ajith Nivad Cabraal has said the government may stop supplying dollars to pay for the oil import bills from May.

 The government’s earlier move was to allow more rupee flexibility after it refrained from intervening in foreign exchange markets last month.

In contrast with previous year, where the market hit all-time high of 7,800 levels (14th Feb 2011), Colombo stock exchange yesterday witnessed notable losses in both benchmark indices and lost further LKR 69.0bn in market capitalization. ASI lost 190.02 (-3.65%) to end at 5,009.96 while sensitive MPI lost 170.37 points (-3.77%) to close at 4,353.80.

Sri Lanka’s Central Bank has won an international award for its latest “currency note series” at an international competition organized by the International Association of Currency Affairs.

SriLankan Airlines yesterday has added a brand new Airbus 320 to its fleet thus taking the total number of its aircrafts to 19.

The A320, a narrow bodied mid-range aircraft has been flown down from Toulouse.

The U.S. government is still reviewing the petition filed against the extension of the Generalized System of Preferences (GSP) trade benefit for Sri Lanka, its embassy in Colombo said on Saturday.

Sri Lanka's largest mobile phone operator Dialog Axiata is offering a satellite navigation application tool for mobile phones that can be downloaded from the web.