The money market interest rate has fallen sharply after CBSL adopting monetary easing from the second half of 2019. Bond rates have fallen allowing to gain large capital gains for the LKR bondholders. But CBSL believes lending rates have not adjusted as expected and there is further room for lending rates to come down. The rate cut would force Banks and financial institutions to take a calculated risk of investing high-risk instruments than parking money at a low rate with a risk free.
CBSL slashed the interest rates once again to record low to force the secondary market rates to adjust further
Interest RatesJul 9, 2020