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6 July 2023 06:23 pm - 33 - {{hitsCtrl.values.hits}}
The Central Bank today said action will be taken against banks if they do not reduce interest rates in line with the reduction in policy interest rates.
The Central Bank today reduced policy interest rates by 2 percent after reducing them by 2.5 percent in June. Now the policy interest rates remain at 11 percent (deposit) and 12 percent (lending).
The Central Bank Governor Dr. Nandalal Weerasinghe said the average weighted lending rate has come down from 29 percent to about 20 percent in response to the June policy rate cut and other positive developments in the economy.
But with yesterday’s relaxation in the monetary policy, market interest rates should further come down, he pointed out.
Dr. Weerasinghe said banks have been given time to adjust the interest rates on their own to reflect the policy interest rates. If not, the Central Bank will have to take administrative measures to bring down market interest rates, he averred.
Pix by Pradeep Pathirana
Affected Senior Citizen Thursday, 06 July 2023 06:40 PM
Bringing down interest rates will affect us senior citizens very badly as we depend on the interest to pay our bills and buy food and pay rent and medicines. HOW WILL WE POOR FOLK MANAGE ON A MONTHLY BASIS ?
Sam Silva Thursday, 06 July 2023 07:02 PM
Nandan, you can't threaten the other banks but let them operate independently so people have a choice selecting a bank. Also have you forgotten about the bond scam money that was robbed during you being the deputy governor . If bring that chunk of money back with the help of your master who also involved it will be a relief to the people and the country.
Senior citizen Thursday, 06 July 2023 07:21 PM
Senior citizen are suffering....now add to our misery
Senior citizens making making interest income while EPF holders see their funds depreciate Thursday, 06 July 2023 09:17 PM
Central Banks harms senior retired citzens, and also those who work by making EPF interest income on Government Bonds only 9 percent. At least senior citizens make a lot more on interest, than the pension fund growth of working people.
Indrajith Friday, 07 July 2023 10:08 AM
Sadly one cannot have the cake and eat it too. All this time a lot of people were screaming their heads out that interest rates were too high and was contributing to thw rapid contraction of the economy. Now when interest rates and being lowered another section starts screaming that the earning on their investments will be dropping hurting them badly. One is between the devil and the depp blue sea it seems.
Bushel Thursday, 06 July 2023 07:56 PM
Why cant you get the looters to face the consequences ?
Hesh Thursday, 06 July 2023 07:56 PM
A true captain this man
Rex Jarkie Thursday, 06 July 2023 08:55 PM
bank have drastially reduced the FIXED DEPOSIT INTEREST RATES effecting the senior citizen who suffering with the drugs and all other item flying up n up to the sky
Mahila Friday, 07 July 2023 04:04 AM
The drugs and all other items flying high is because of Exchange rate being 1.00 USD = Rs 300.00 plus since 2022!! That scenario was the planned pegging of the USD at an unrealistic value at Rs. 210.00 for long time resulting in drying up inflow of remittances!!!?? The rate to stabilise it would take more time and good behaviour effort!!?? Hard Times - sometime! When the possible negative of the USD 'Pegging', w/o allowing it to find the realistic median 'Market value', all the supporters of the Messiah including the Weeraya, Gaman-pilla, were quick to point out the excellence of the then Finance Ministers acumen in handling worldly matters!!! Now why complain as it's too late!!! 4 Years folly to unmake!? GOOD MEDICINE TASTES BITTER – QUININE
Anand Thursday, 06 July 2023 09:51 PM
Bank rates are based on money in circulation and borrower risk basis. Regulator can comes of with a mechanism to manage the bank rates instead of advising or threatening them. The mechanism can be linked repo rates and final customer rate can be with a spread.
Sumantha Friday, 07 July 2023 10:12 AM
If the reduction in funding costs are not passed on to the consument but rather held back to boost the bottom line and hide inefficiencies, well then there needs to be a directive.
Gb Thursday, 06 July 2023 11:31 PM
All these cut backs people are facing, due to politicians looting and mismanaging everything, those who puy us in this situation should be billed and jailed if they do not pay, not poor people who are already struggling, disgusting gov
Tissa Fernando Friday, 07 July 2023 12:50 AM
Banks may have reduced the interest rates on deposits but they have hardly reduced the interest rates on loans. So, not sure which interest rates CB Governor is talking about. If Loan interest rates remain the same , the economy will suffer.
Amaran Friday, 07 July 2023 02:39 AM
The COST OF BORROWING by investors should come down. If the gap between LENDING and BORROWING rates can be narrowed down, the both will benefit. If the Investors could borrow at a low rate, that will stimulate the economy. By way of multiplier effect, the COUNTRY AS A WHOLE will benefit.
Amaran Friday, 07 July 2023 02:43 AM
Listen to MP Sumanthiran's debate speech on Domestic Debt Restructing in parliament, people will understand why EPF
Ram Friday, 07 July 2023 03:18 AM
I don't like his arrogance. when he started on the job he appeared to be humble and now the arrogance of his Boss RW is fast spreading to others. Aragalaya kind of action will be necessary to subdue these men
Joe Biden Friday, 07 July 2023 03:19 AM
@Affected Senior Citizen: What CB Governor is talking about is the bank lending interest rates. Banks have already reduced the fixed deposit interest they payout but they have not reduced the interest on loans they giveout.
Fred Friday, 07 July 2023 04:56 AM
Could someone in authority provide a road map on what is going on for the layman to follow.Maybe Wijewardena the retired Deputy Governor who contributes to the newspapers often, on the thinking behind these moves and what they expect to achieve.Can be a regular feature Will help a lot of people
Dee Friday, 07 July 2023 06:03 AM
Banks are like poultry farm owners!
Kabir Hashim Friday, 07 July 2023 07:11 AM
Nandalal was the deputy of Arjuna Mahendran in 2015, during Bond scam.
Poliya Friday, 07 July 2023 07:59 AM
Increasing lending rates and reducing deposit rates is like the game of the state that is hora-polis, name sake state paralized and unable to take right decisions because same old thieves continues....
Grace Friday, 07 July 2023 08:10 AM
@ Senior Citizens! Avoid going to government hospitals. May be those in power want to reduce the senior citizen population. I pray for you.
Neeyaz Junus Friday, 07 July 2023 08:46 AM
We senior citizen are really hit. We depended on this interest from the special fixed deposit scheme for senior citizen to survive
Mahila Friday, 07 July 2023 09:02 AM
The drugs and all other items flying high is because of Exchange rate being 1.00 USD = Rs 300.00 plus since 2022!! That scenario was the ill-informed, planned “pegging” of the USD at an unrealistic low (artificial) value of Rs. 204.00 for long time resulting in drying up inflow of remittances!!!?? Remittances were held back by foreign workers etc., as (Foreign workers) were concerned for the WELFARE of their families (as the converted Currency was less that the real value)! This is understandable concern on their part!!? Similar to senior citizens being concerned of lowering Interest rates and resultant down turn in their earnings from their savings!!?? The rate to stabilise it would take more time and good behaviour effort!!?? Hard Times ahead – past ‘flawed Pegging’!
Jude Friday, 07 July 2023 09:03 AM
Nanda not Worth of monthly salary of Rs.400,000 a month,!! Utter waste of money!! Can't understand why leave Australia to become a bureaucrat in SL. The answer is simple, you can make More money in SL than in Australia, Just ask Nanda!!
Terrence K Friday, 07 July 2023 09:03 AM
By this decision of the CB the country is going to lose on foreign currencies from expatriates who wish to invest their foreign currencies converted to Sri Lankan rupees since the past interest rates were attractive. By reducing the interest rates there will be a downward trend in deposits coming to this country by which other developing countries will benefit ie. Vietnam., Bangladesh etc. Also there could arise a situation where deposit holders will withdraw their monies and act as money lenders. Basically what the government is doing utilizing the monies deposited by customers by lowering the rates ie. senior citizens, substantial amount of savings account holders etc and providing lenders with reduced interest rates. This is fleecing the poor customers of their interest payments. My question is by doing this will inflation fall a BIG NO it only adds to the lining of pockets of Big businessmen. By forcing the interest rates downwards will only lead todrop in incomes of the poor
Asoka Friday, 07 July 2023 10:22 AM
The bottom line is that our interest rates were ridiculously and artificially high, partly due to the prevailing high inflation rates. Now with inflation projected to come down to single digit by next month, interest rates for both bank deposits and lending will need to come down in sync. One cannot have low inflation and a high interest rate regime. If inflation could be brought down to able 3% that will be great. But the down side is that return on deposits will come down much further. Anyway cheap funding can fuel inflation and it needs to be carefully managed.
dilip Friday, 07 July 2023 09:47 AM
definitely interest rates to be reduced, all people thinking depositing money in the bank and gain from interest. did anyone think how the bank earn money to give higher interest rates to depositors. very poor island mentality no business ideas of majority people in SL so no development expect for years to come
Arnold Friday, 07 July 2023 10:04 AM
But the damage is done. So many SMEs have closed down due to sky high cost of capital.
Sue Kirthisinghe Friday, 07 July 2023 10:06 AM
You very cunningly took away the fixed senior citizen's deposit rate of 15% and now you are insisting the banks should bring down the other rates through which we CS' lived and more specifically bought our medicines which are very highly priced. How do you expect us to live? At least bring back the standard 15% for senior citizens or maybe you want all of us to die soon without medicine and a decent way of living. You do whatever you want with the state banks but don't dictate to the private banks so that they can decide on their own and we can make our own decisions. Please don't be arrogant. All these problems are not our fault. Please keep that in mind when you take these drastic decisions.
DISGUSTED SENIOR CITIZEN Friday, 07 July 2023 01:32 PM
I do agree with the sentiments .... please do introduce the 15% interest for Senior Citizens so that we can live a decent life in our old age ... we need money for medicines which are so expensive and pay rent where we live and the food too costs a packet these days ..... do consider thus request please so as to help us ...
Senior CITIZEN Friday, 07 July 2023 02:40 PM
WE ARE SUFFERING AND WILL SUFFER EVEN MORE WHEN THE FD RATES FOR SENIOR CITIZENS IS REDUCED ... NANDASENA YOU ARE KILLING US SLOWLY. ..
Nihal S Friday, 07 July 2023 11:32 PM
I had a lot of respect for this guy, when he joined the Central Bank during challenging time. Bit now I see he is also a politician and getting what ever he can get from our economy and at the end returning to Australia. Nandalal has no commitment to Sri Lanka - take my words here.
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