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Policy Position

Mar 22, 2012 (LBO) - Central bank 'moralsuasion' on commercial banks in Sri Lanka may have to be strengthened if current credit demand prevails, Treasury secretary P B Jayasundera said.
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He said the monetary authorities will wait and watch how the economy responds to recent interest rate hikes and curbs on lending.
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The economy is now facing seasonal demand with recent wag hikes and in the run-up to the April new year festive season, he said.

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The central bank had earlier imposed limits on lending by banks in an effort to curb what was considered excessive credit growth which was also fuelling import demand.

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