CBSL lowering interest rates will boost economy: Siyambalapitiya

Saturday, 12 August 2023 01:35 - - {{hitsCtrl.values.hits}}

State Finance Minister Ranjith Siyambalapitiya said yesterday that the Central Bank’s decision to lower interest rates is expected to infuse around Rs. 200 billion into the economy, fostering a more robust and dynamic financial landscape.

“This reduction of lending rates from 4% to 2% is anticipated to have a cascading effect on lending capabilities, enabling banks to extend credit and loans more freely to businesses and individuals alike,” he added.

Siyambalapitiya also highlighted that this adjustment would lead to a significant expansion of lending capacity within the banking sector.

The State Minister also underlined the ripple effects of this policy shift, noting that the anticipated Rs. 200 billion injection into circulation would stimulate increased demand, subsequently driving economic growth.

“The decision aligns with the Government’s broader strategy to accelerate economic growth and recovery in the wake of recent challenges. With inflationary pressures and fluctuating market conditions, the move to enhance lending capacity is seen as a timely and strategic measure to invigorate the economy,” he added.