Central bank credit to government which fell to a low of 69.
9 billion rupees in September had risen to 109 billion rupees in December as government budgets deteriorated.
Up to October Sri Lanka has posted an estimated budget deficit of around 8.5 percent of gross domestic product which is 120 percent of the target for 2009.
Inflation also accelerated to 6.5 percent in January from a year earlier, against 4.8 percent in December.
Loans to private businesses rose to 1,195.8 billion rupees in December from 1,188.1 billion in November and 1,176.4 billion in October.
Rupee denominated loans to private businesses rose to 1,044.6 billion rupees in December up 9.
1 billion rupees from a month earlier, data released by the Central Bank said.
Loans from the foreign currency books of commercial banks were steady at 151.4 billion rupees.
Loans to private sector contracted until August 2009 as Sri Lanka recovered from a balance of payments crisis and banks concentrated on recovering non