CBSL further reduces policy interest rates

The Monetary Policy Board of the Central Bank of Sri Lanka (CBSL) , at its meeting held yesterday,
decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility
Rate (SLFR) of the Central Bank by 25 basis points (bps) to 8.25 per cent and 9.25 per cent,
respectively, the Board said in a statement. 

The Board arrived at this decision following a careful assessment of the current and expected macroeconomic developments and possible risks and uncertainties on the domestic and global fronts with a view to maintaining inflation at the targeted level of 5 per cent over the medium term, while enabling the economy to reach its full capacity.

In arriving at this decision, the Board considered the need to signal the continuation of the eased monetary policy stance, thereby inducing a further reduction in market lending rates to support economic activity, amidst a benign inflation outlook, the statement added. 

The Board also noted that, based on the available information, inflation is likely to remain below the inflation target of 5 per cent by a sizeable margin for the next several months before aligning with the targeted level over the medium term.