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Confidence to boom after election – CBSL Governor
October, 11, 2019
Central Bank Governor Dr. Indrajit Coomaraswamy is optimistic that the consumer confidence and sentiment level will gradually pick up after the election.
Speaking further governor defended the monetary authority’s decision to impose caps on interest lending rates, insisting that it was an effort aimed at giving a strong boost to the economy to grow once the election cycle was over.
“Since the time that the deposit rate caps were introduced at the end of April. We have seen the average rated new deposit rates come down by 284 basis points. In that same period the average rated lending rate has come down by 87 basis points. Now of course banks can’t immediately pass on the new deposit rates because the stock of deposits that were in existence at the end of April take time to mature. Which why in the direction issued by the Central Bank to banks to bring down lending rate caps gives some time to bring these rates down gradually,” he said whilst addressing the media at the Central Bank today (11).
“So what we are saying is basically to pass on the reduction in the deposit rates that were generated by the imposition of the deposit cap to pass the loan to the bank customers and in an ideal world after the elections when confidence and sentiment will pick up, we will have a lending rate structure which can boost growth,” Governor added.