Central Bank further increases interest rates

The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on April 8, decided to increase interest rates.

The banking regulator said in a statement that it was decided to increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 700 basis points to 13.50 per cent and 14.50 per cent, respectively, effective from the close of business on April 8.

“The Board, having noted the inflationary pressures that could further intensify in the period ahead, driven by the build-up of aggregate demand, domestic supply disruptions, exchange rate depreciation and the elevated prices of commodities globally, was of the view that a substantial policy response is imperative to arrest the buildup of added demand driven inflationary pressures in the economy and preempt the escalation of adverse inflationary expectations, to provide the required impetus to stabilise the exchange rate and also to correct anomalies observed in the market interest rate structure,” it said. The Monetary Board met under the chair of newly appointed Governor Dr. Nandalal Weerasinghe, who assumed office on Thursday.