Sri Lanka, May 26 -- The Governor of the Central Bank of Sri Lanka (CBSL), Dr. Nandalal Weerasinghe says that increasing policy interest rates leads to a rise in market interest rates.

Speaking at a media briefing today (26), the CBSL Governor stated that the main objective of raising policy rates is to influence market lending rates upward.

He explained that the move is intended to reduce excessive borrowing in the economy.

The CBSL Governor further said that the economy has not experienced any contraction so far and is expected to continue growing over the next two quarters.

He noted that the current situation is different from the 2022 economic crisis, where contraction occurred amid severe macroeconomic instability.

Weerasinghe a...