The Monetary Board of the Central Bank of Sri Lanka decided to remove caps imposed on lending interest rates applicable to credit cards, pre-arranged temporary overdrafts, and pawning facilities to facilitate the effective transmission of the policy adjustment.

The Board noted that such policy and regulatory actions, upon quick transmission, would raise the cost of funds, thereby containing the expansion of money and credit; inducing the return of excessive currency in circulation to the banking system; eliminating interest rate anomalies; easing the pressure on the exchange rate; and containing the build-up of demand pressures in the economy.