The Central Bank (CB) will be taking necessary action to accelerate private sector growth considering it as an immediate priority by reducing high lending rates at banks when granting private sector credit.
A Working Committee appointed on the directions of Prime Minister Ranil Wickremesinghe will submit a report soon (Wednesday or Thursday) with recommendations of necessary action to reduce the private credit interest margin.
This decision was taken at a high level meeting chaired by the Prime Minster with CB officials, chartered accountants and bankers on how to narrow the gap between the lending rates and private credit growth, CB Governor Indrajit Coomaraswamy told a media conference in Colombo on Monday evening.
At present there was a private sector credit slow down, he said adding that private credit growth fell by 4.3 billion rupees in January and grew by 4.6 billion rupees in February.
It is essential to maintain the average credit growth at Rs. 75 billion monthly to achieve the 13.5 per cent annual private credit growth target for 2019, he revealed.
"All the benchmark interest rates have come down significantly this year, but deposit and lending rates are still going up," he said.
The CB maintained policy rates unchanged in April while suggesting that there is a strong case for a rate cut in the future. (Bandula)
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