CBSL keeps policy interest rates unchanged

By Nuzla Rizkiya

The Monetary Policy Board of the Central Bank of Sri Lanka has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) at their current levels of 8.50 percent and 9.50 percent, respectively.

The decision was made to maintain inflation at the targeted level of 5 per cent over the medium term while supporting the economay to reach its potential, according to the board.

Accordingly, the Statutory Reserve Ratio stands at 2.00 percent, as per the Monetary Policy decision announced at the review meeting yesterday.

Moreover, the Central asserted that there remains space for market lending interest rates to decline further given the prevailing accommodative monetary policy stance and the continued decline in the cost of funds of financial institutions.

Further reduction in market lending interest rates is imperative for the easing of domestic monetary conditions and domestic economic recovery, according to the bank.

Furthermore, repeated emphasis was made on passing the benefits of the eased monetary conditions to the borrowers without further delay.

However, the Monetary Policy Board will observe incoming data and assess the risks to the inflation outlook and stand ready to take appropriate measures to maintain domestic price stability, the Central Bank cautioned.