Central Bank of Sri Lanka Maintains Key Rates and Imposes Interest Rate Caps
The Monetary Board of the Central Bank of Sri Lanka has made key decisions regarding the country’s monetary policy. In its latest announcement, the Central Bank has chosen to keep the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) unchanged at their current levels of 11.00 percent and 12.00 percent, respectively.
Furthermore, the Central Bank has taken a significant step by imposing interest rate caps on various financial products offered by licensed banks across the nation. Effective immediately, the interest rates on pawning facilities will be limited to 18 percent, pre-arranged temporary overdrafts will carry a maximum interest rate of 23 percent, and credit cards will be subject to an interest rate cap of 28 percent, all calculated on an annual basis.
This move is aimed at fostering fair and transparent lending practices within the banking sector while ensuring that consumers are shielded from exorbitant interest rates. By setting these interest rate ceilings, the Central Bank seeks to strike a balance between maintaining a conducive economic environment and protecting the interests of borrowers.
These decisions come at a crucial time for Sri Lanka’s financial landscape, offering stability and predictability to both borrowers and lenders alike. The Central Bank’s actions are expected to have a positive impact on the overall economy by supporting responsible lending practices and promoting the efficient allocation of financial resources.