The Central Bank on Friday put the savings to the private sector in the form of reduced interest cost since the new Government took office at Rs. 365 billion or 2.4% of GDP.

Speaking at the launch of CBSL short-term Road Map, Governor Nivard Cabraal noted that whilst record corporate profits being reported by companies could be due to their hard work, the reduction in finance cost as a result of lower interest rates ensured by former Governor Prof. W.D. Lakshman played a part too.

CBSL also said that the Government had also benefited due to the low-interest environment with a saving of Rs. 313 billion (2.1% of GDP) for the public sector.

Governor said that these numbers were shared to stress the fact that a low-interest rate regime is an important factor if Sri Lanka were to make the businesses more viable than at present.

“In times of stress, it might not be possible to keep interest rates at low level hence the need for everyone’s cooperation to maintain at reasonable levels so both lenders and borrowers could benefit,” Cabraal emphasised.

As per CBSL data, credit to the private sector as at July 2021 stood at Rs. 6.6 trillion up 14% from Rs. 5.8 trillion a year ago. Credit to public corporations rose by 16% to Rs. 1.1 trillion, net credit to the Government was Rs. 5.5 trillion, up 46% from a year ago.

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