January, 30, 2025
The growth of private sector credit continued to accelerate, supported by declining market lending interest rates, according to the Central Bank of Sri Lanka's latest Monetary Policy Review: No. 01 – January 2025.
Following the recent monetary policy easing, short-term money market rates declined, while market lending and deposit rates also trended downward. This accommodative stance has fueled increased credit flows to the private sector, reflecting a broader recovery in economic activity.
The Central Bank anticipates that the expansionary momentum of private sector credit will persist in the coming months, further strengthening economic growth. Meanwhile, yields on government securities continued to decline, reflecting improved fiscal performance and reduced sovereign risk premia.
With sustained credit growth and favorable interest rate conditions, economic activity is expected to maintain its positive trajectory in 2025.
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