Central Bank further tightens monetary policy stance

 

The Monetary Board of the Central Bank of Sri Lanka (CBSL) has decided to increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 100 basis points each, to 6.50 percent and 7.50 percent, respectively.

 The decision came after careful consideration of the current and expected macroeconomic developments both globally and domestically. 

During its meeting convened on 03 March, the Monetary Board decided to reinforce its stance adopted in January 2022. 

Thereby, it was also decided to revise upwards the caps imposed on interest rates applicable to credit cards to 20 per cent per annum, on pre-arranged temporary overdrafts to 18 per cent per annum, and on pawning facilities to 12 per cent per annum. 

Directions to make these regulated interest rates effective will be issued shortly, the Central Bank said further in its monetary policy review.

 The Central Bank said, considering the severity of the external shocks and continued disruptions to domestic economic activity, its Monetary Board was of the view that a comprehensive policy package containing both traditional and non-traditional measures, along with other initiatives that have an impact on the overall economy, is essential to counter such economic headwinds.