The Central Bank of Sri Lanka (CBSL) has decided to maintain the interest rates at their existing levels.

In its Monetary Policy Review for this month (August) CBSL said that market interest rates continue to decline in response to the monetary policy measures taken by the Central Bank.

It also said yields on Treasury bills, which serve as a benchmark for market interest rates, have declined by around 675-715 basis points, so far this year. Meanwhile, the weighted average call money rate has also declined by 500 – 600 basis points. Amongst other market interest rates, the average weighted deposit rate has declined by about 65 basis points while the average weighted prime lending rate has declined by about 415 basis points, by July.

The decline in interest rates, both in nominal as well as real terms, together with improved business confidence is expected to encourage economic activity in the country during the remainder of the year, states the CBSL.