Taking stock of current ground realities will indicate if the present low interest rate scenario is sustainable says new Treasury Secretary.
P. B Jayasundera, who took office on Monday, says the governments policy on interest rates will be reviewed shortly after assessing current requirements to spur economic growth.rn
rnOnly last week, Central Bank left its key short-term rates unchanged, but cautioned that a higher than estimated budget deficit, from 6.8 per cent to 7.3 per cent of GDP could pressure the governments borrowing programme.rn
rnThe overnight repurchase rate (repo rate) was kept at 7.00 percent and the reverse repurchase rate (reverse repo) at 8.50 percent, the bank said in a statement following its monthly Monetary Policy Meeting last Thursday. rn
rnThe bank has maintained its soft interest bias since the political crisis blew up on November 04, 2003 and has met market players many times, to assure them that there would not be a change in its policy of lowering interest rates. rn