Rate Cut

Oct 29, 2009 (LBO) - Sri Lanka's state-run People's Bank said it was cutting lending rates for a range of sectors following a presidential directive to give loans at rates between 8.0 to 12.0 percent. The bank said in a statement Wednesday that it will cut lending rates with "immediate effect" following President Mahinda Rajapaksa's "advice at a press conference held at Temple Trees (official residence) yesterday to all state bank heads"

Rates for agriculture, micro finance, retail and trade, fisheries, construction, co-operatives, property development, housing, tourism and hotels and undefined development projects would be cut to 12.0 to 14.0 percent from 19.0 percent.

Approved housing loan applications for state workers would be released before November 30. State workers get loans at rates around 4.0 to 11.0 percent.

Interest rates on loans to the sectors of imports and exports have also been reduced to 11 percent and 12 percent respectively.

Pawning, where small loans are given against gold collateral has been cut to between 17.5 percent and 14.0 percent.

"By reducing the rates of interest for loans in all these sectors, People’s Bank has given great relief to the over