Colombo (LNW): The Central Bank of Sri Lanka (CBSL) has announced a further drop in both the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 100 basis points, setting them at 10.00 per cent and 11.00 per cent respectively.
The was made during the inaugural monetary policy assessment by the Monetary Policy Board, as outlined by the Central Bank of Sri Lanka Act, No. 16 of 2023, on October 4th.
The Board’s move to cut policy interest rates comes after a thorough examination of current and anticipated economic conditions.
They aim to stabilise inflation at a target of 5 per cent in the medium term by considering factors like low inflation and favourable inflation expectations, ultimately pushing the economy closer to its growth potential.
The CBSL’s Monetary Board is optimistic that these reduced policy interest rates, coupled with previous significant monetary policy relaxations, will expedite a decline in market interest rates.
This includes the CBSL’s directive for banks to cut interest rates and the considerable decrease in risk premiums on government securities.
In conclusion, the CBSL’s announcement encourages the financial sector to swiftly extend the benefits of relaxed monetary conditions to consumers and businesses, aiding the expected economic revival.
Read full CBSL report: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20231005_Monetary_Policy_Review_No_7_2023_e_U53s8.pdf
