May, 20, 2014
The Monetary Board of the Sri Lanka Central Bank (SLCB) has decided not to change the policy interest rates that decide the interest rates of commercial banks since the borrowings of the private sector have recorded a positive growth during March this year.
Hence, the SLCB policy interest rates would remain unchanged from between 6.5 to 8.0 percent.
Meanwhile, the SLCB has announced that the government is preparing to provide a guarantee for gold backed loans.
The default in gold backed loans had increased recently due to the downward trend of gold prices in the world market.
The SLCB said that its Monetary Board had given the green light for the bank to provide a guarantee for gold backed loans on behalf of the government to revive these loans.
The decrease in gold backed loans is also a reason for the decrease in borrowings from the private sector.
The SLCB has further said that there are still opportunities for the private banks to further reduce their interest rates.