Private sector lending rates increase as FD returns fall

PRIVATE sector lending rates remained elevated in 2025 as demand for credit improved even as returns on bank fixed deposits declined in line with benchmark Treasury Bill rates.

- 

(CBSL GraphicsDesk)

While the Central Bank of Sri Lanka (CBSL) reduced its policy corridor by 25 basis points (bps) during 2025, the Average Weighted Prime Lending Rate (AWPLR) of the commercial banking sector increased by 17 bps year-on-year (YoY) to 9.07% in the week ending 2 January. In contrast, the Average Weighted New One-Year Fixed Deposit rate fell by 66 bps to 6.53% from 7.19% a year earlier.

The Overnight Policy Rate declined.

by 25 bps to 7.75% over the year, while the Standing Deposit Facility Rate and Standing Lending Facility Rate were also reduced by an equal margin to 7.25% and 8.25%, respectively.