CBSL maintains interest rates amid ongoing economic challenges

May 28, Colombo (LNW): The Monetary Policy Board of the Central Bank of Sri Lanka (CBSL) has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) at their current levels of 8.50 per cent and 9.50 per cent, respectively.

This decision, made during the Board’s meeting on 27 May 2024, follows a comprehensive assessment of current and projected macroeconomic developments and potential risks both domestically and globally.

The Board aims to maintain inflation at the targeted level of 5 per cent over the medium term while supporting the economy to achieve its potential, according to their statement.

Despite the stability in the medium-term inflation outlook and well-anchored inflation expectations, the Board recognised the necessity for a further reduction in market lending interest rates.

This alignment with policy interest rates and other benchmark rates is crucial for easing domestic monetary conditions and fostering economic recovery.

However, this decision comes against a backdrop of the government’s ongoing struggle to effectively address the economic crisis.

The failure to implement robust recovery measures has left the economy in a fragile state, further underscoring the need for a reduction in lending rates to stimulate domestic economic activity.