Central Bank raises interest rates after long spell

The Central Bank (CB) on Friday raised interest rates by 50 basis points to 6.50 per cent on the Standing Deposit Facility Rate (SDFR) and 8 per cent on the Standing Lending Facility Rate (SLFR).
In a statement, the CB said the decision was taken by the Monetary Board at its meeting on Friday having considered economic developments in the past month.

“It was observed that, in spite of the recent policy measures taken by the Central Bank and some upward adjustments observed in market interest rates, certain risks to macroeconomic stability continue. In particular, the Monetary Board was of the view that the excessive growth of broad money fuelled by domestic credit expansion in the midst of continued upward trend in underlying inflation requires pre-emptive policy measures in order to contain further build-up of demand driven inflationary pressures. Accordingly, the Monetary Board decided to increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 50 basis points each, to  respectively, effective from the close of business on 19 February 2016.” – ENDS -