Explosion of credit to private sector this year at low interest to ensure economic recovery – CB

A record Rs. 850 billion worth of credit would be given to the private sector by the Banks in 2021, CBSL’s Director of Economic Research Dr. Chandranath Amarasekera told the media yesterday.

The increase in the Private sector credit growth would be due to low interest rates, introduction of loan targets for selected segments of the SME sector and the increase in demand for credit as investor confidence booms, Dr. Amarasekera said.

CBSL had already commenced a dialogue with banks to iron out issues that might arise, he said.

Dr. Amarasekera said that the Standing Deposit Facility Rate will remain at 4.5% and the Standing Lending Facility Rate will remain at 5.5%. The Monetary Board decided to keep the policy interest rates unchanged considering the global and local situation, he said.

The Board also decided to keep interest rates low until the economy showed a sustainable recovery, Dr. Amarasekera said.