Oct 29, Colombo: Sri Lanka government has decided to set up a 'Tea Price Stabilization Fund' with an initial investment of 1.5 billion rupees to safeguard the industry ailing due to the sharp decline of demand believed to be caused by the global financial crisis.

Several vital decisions were taken on the instructions of President Mahinda Rajapaksa, at a discussion held at the Central Bank yesterday under the patronage of Governor Ajith Nivard Cabraal. Plantation Ministry Secretary Indrani Sugathadasa, Sri Lanka Tea Board Chairman and other key stakeholders and representatives of commercial banks were present at the meeting.

Commercial banks have also been directed to cut interest rates on loans offered for purchasing tea by six percent, while the existing grace period of one week for settlement of these loans is to be extended to four weeks.