Though prices of consumer goods have increased creating more pressure on the Rupee with the new government’s tax reductions and increase in the salaries of government employees through its interim budget, the Central Bank of Sri Lanka (CBSL) has decided not to revise the policy interest rates that decide the interest rates of commercial banks for the month of February as well.

The CBSL has stated that the loans obtained by the private sector in December 2014 have shown a record increase to Rs. 76.5 billion.

The CBSL has also stated that the borrowings by the private sector from the banking system in 2015 would also increase. By end January 2015 Sri Lanka’s inflation had risen to 3.2 per cent as against the 2.1 per cent in December 2014.

Inflation would decrease considerably in the near future due to the slashing of fuel and consumer goods prices, says the CBSL.

It is noteworthy that so far the Rupee has depreciated by 1.4 per cent as against the US dollar.

Amidst such an economic situation, the CBSL has said that its policy interest rate would remain unchanged at between 6.5 to 8.0 per cent for February as well.