CB tightens monetary policy by 100bps

The Central Bank this morning announced the tightening of the monetary policy by 100 basis points to contain rising inflation and the possible build-up of any inflation expectations.

Accordingly, the Standing Deposit Facility Rate will be increased to 14.50 percent while the Standing Lending Facility Rate to 15.50 percent. The Statutory Reserve Ratio will remain unchanged at 4 percent.

Meanwhile, the Central Bank said the economic activity in the country is expected to record notable downturn in the near term due to power cuts and shortage of fuel.

The Central Bank in April hiked the policy rate by mega 700 basis points to correct the direction of the interest rates and also to curb demand-side inflation pressures.