Sunday, 16 February 2020 09:17

Sri Lanka strives to expand the economy

Sri Lanka is now striving to expand the economy allowing the commercial banks to make more loans to consumers and businesses in the face of a cash crunch during the week ending Friday 14, economic analysts said.

The reserve money decreased this week compared to the previous week mainly due to the decrease in deposits held by the commercial banks with the Central Bank.

The total outstanding market liquidity was a deficit of Rs. 6.349 billion by end of the week, compared to a deficit of Rs. 5.472 billion by the end of last week, Central Bank announced.

Manufacturing activities expanded in January 2020, at a slower rate, compared to December 2019, while Services sector continued to expand in January 2020, also at a slower rate compared to December 2019.

During the year 2019, domestic tea production declined in comparison to the previous year owing to a considerable decline in production during the fourth quarter.

Production of rubber decreased in response to low market prices for rubber as well as adverse weather conditions prevailed towards the end of the year. Meanwhile, coconut production increased considerably continuing its growth momentum, Central Bank revealed.

During the period (08.02.2020 to 14.02.2020), crude oil prices largely showed an increasing trend. Crude oil prices increased mainly due to expectations of major producers on deeper output cuts to offset the slower demand caused by Coronavirus outbreak in China.

During the year up to 14th February 2020 the Sri Lanka rupee appreciated against the US dollar (0.1 per cent).

Given the cross currency exchange rate movements, the Sri Lanka rupee appreciated against the euro (3.6 per cent), the pound sterling (0.7 per cent), the Japanese yen (1.2 per cent) and the Indian rupee (0.1 per cent) during this period.

(LI)

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