The Central Bank of Sri Lanka lowered the standing deposit facility rate and the standing lending facility rate to 10% and 11%, respectively. — Reuters
COLOMBO: Sri Lanka’s central bank has reduced key policy rates by 100 basis points, as expected, doubling down on efforts to spur growth and finalise the first review of a US$2.9bil bailout package from the International Monetary Fund (IMF).
The Central Bank of Sri Lanka (CBSL) lowered the standing deposit facility rate and the standing lending facility rate to 10% and 11%, respectively, it said in a statement, to put the crisis-hit economy on a firmer growth footing.
CBSL had already reduced rates by 450 basis points in two moves over June and July after raising them by a record 1,050 basis points from March 2022 to counter the island’s worst financial crisis in over seven decades.
The rate cut was in line with market expectations and comes after the IMF failed to reach an agreement with the island nation in its first review of its bailout package last month.
This was due to a potential shortfall in government revenue.
That could delay the release of the second tranche of funds under the bailout. —Reuters
