Sri Lanka's private sector credit grew by 33.5 percent in 2011 reflecting the buoyant post-war growth, the Central Bank said on Wednesday.
Largely reflecting the robust expansion of credit, broad money growth also remained at a level higher than that projected for 2011, the Central Bank said in a statement.
However, market interest rates moved upwards in recent months, in line with changing liquidity conditions in domestic money market.
As a result, the benchmark yield on one year treasury bills recorded an increase of around 175 basis points in 2011, while the average weighted deposit rate recorded an increase of about 100 basis points, the statement said.
Meanwhile, the average weighted prime lending rate increased by around 120 basis points in 2011, although at the last auction, the weighted average yields on treasury bills in the primary market remained unchanged, indicating some stabilization in market conditions.
These moderate upward movements in interest rates are likely to exert a restraining effect on monetary aggregates, which would, in turn, help to curb the buildup of demand pressures, the Central Bank said./.