Central Bank of Sri Lanka Cuts Key Interest Rates by 25 Basis Points

July 24, Colombo (LNW): The Monetary Policy Board of the Central Bank of Sri Lanka has decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 25 basis points (bps) to 8.25 per cent and 9.25 per cent, respectively. This decision was made at the Board’s meeting on 23 July 2024, following a comprehensive assessment of current and anticipated macroeconomic developments, as well as potential risks and uncertainties on both domestic and global fronts. The aim is to maintain inflation at the targeted level of 5 per cent over the medium term while enabling the economy to reach its full capacity.

In making this decision, the Board emphasized the importance of signaling the continuation of an eased monetary policy stance, thereby encouraging a further reduction in market lending rates to support economic activity amidst a benign inflation outlook. “The Board noted that, based on the available information, inflation is likely to remain below the inflation target of 5 per cent by a sizeable margin for the next several months before aligning with the targeted level over the medium term,” the central bank stated.