Inflation ( CCPI)5.9% (Feb 2024)
GDP4.5% (4Q 2023)
Unemployment4.7% (3Q 2023)
3M T-Bill Rate10.17%
12M T-Bill Rate10.28%
2Y T-Bond Rate10.85%/ 11.00%
4Y T-Bond Rate12.10% / 12.20%
USD/LKR301/303
Reserves $4.517Bn (Feb 2024)
Cum. Trade Deficit $4,866 Mn (Dec 2023 cumulative)
Cum. Fiscal DeficitLKR 2,020 Bn (Nov 2023)

Growth of interest income and expense in the banking sector is soaring

Bank & FinanceNov 10, 2022
Growth of interest income and expense in the banking sector is soaring

During 2021, banks seem to have enjoyed a sharp decline in the interest cost as the interest rate was kept at a very low level. After the liberalization of interest rates, the interest income, as well as interest expense, started soaring in 2Q 2022.

Bank will face numerous challenges as interest rates are expected to elevate throughout 3Q as well as 4Q 2022. During 3Q 2022 the bank’s borrowing cost increased further by 5%.

Disclaimer

Charts represents an assessment of the market environment as of the date indicated and it is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision. This document contains general information only and does not take into account an individual’s financial circumstances. An assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decisions.