The Central Bank of Sri Lanka (CBSL) has decided to keep its policy interest rates which decide the interest rates of commercial banks unchanged for December as well, while taking into consideration the prevailing economic trend.

Accordingly, the CBSL policy interest rate for December 2014 will continue to be between 6.50 to 8.00 per cent.

The CBSL says that after November 2009 Sri Lanka’s inflation has reached the lowest point. While inflation decreased to 1.6 per cent last October, in November it has fallen further to 1.5 per cent.

The bank expects that inflation would continue to remain low due to the fall in fuel prices in the world market.

The borrowings from the banking system by the private sector last October has increased by 5.1 per cent, or Rs. 42 billion.

During the first nine months of this year the gross borrowings by the state sector has increased by Rs. 87.3 billion while the gross borrowings from state corporations falling by Rs. 1.2 billion has been a significant feature.

Currently, borrowings from private sector banks have increased since the interest rates are low.