Sri Lanka banks urged to tighten spreads amid slow credit


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Sri Lanka's Central Bank held policy rates at 6.50 and 8.00 percent and urged banks to tighten spreads to lower lending rates as private sector credit demand remained weak.

In May credit to the central government from the banking sector has fallen by 11.5 billion rupees and loans to state enterprise had also fallen marginally.

Credit to private sector had also slowed to 2.2 percent from a year earlier, indicating that credit volumes had contracted about 6.8 billion rupees during May.

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