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The Sri Lanka Central Bank’s new Monetary Board which met under Central Bank Governor Arjuna Mahendran and Treasury Secretary R.H.S. Samaratunge decided not to effect any changes in January to the bank’s policy interest rates which decide the interest rates of commercial banks.

Since the inflation rate is as low as 04 per cent and there are possibilities of rising demands in future, there is also development in the supply sector, says the Central Bank.

The Central Bank speculates that inflation may decline further due to the new government’s recent heavy reduction in fuel prices and the proposed reduction in prices of essential item under the government’s 100 day programme.

Loans from commercial banks have shown a strong increase under the prevailing low interest rates and the loans obtained from commercial banks last November has shown an increase of 6.5 per cent when compared to November 2013, it is stated.

From January to November 2014 Rs 147.6 billion has been obtained as loans from private banks.

While taking these into consideration, the Sri Lanka Central Bank has decided to continue with the policy interest rates at the current 6.50 to8.00 per cent.