Central Bank to continue with current monetary policy stance

The Central Bank of Sri Lanka has decided to continue with its current monetary policy stance, the Bank said in a statement today.

The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 19 August 2020, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 4.50 per cent and 5.50 per cent, respectively.

The Board recognised the necessity to continue the accommodative monetary policy stance, particularly as market lending rates are yet to reflect the full passthrough of policy easing measures implemented thus far.

The Board decided to adopt targeted measures to reduce specific interest rates that it considered to be excessive, which would help marginal borrowers.

The Board anticipates a further reduction in overall market lending rates, thereby encouraging borrowing for productive economic activity and reinforcing support for COVID-19 hit businesses as well as the broader economy, given the conditions of subdued inflation. (Colombo Gazette)