25-Basis Point Cut in Sri Lankan Central Bank Policy Rates

April 3, 2020

The Monetary Board at the Central Bank of Sri Lanka held an emergency session today in which members agreed to cut the Standing Deposit Facility rate to 6.0% from 6.25% and the Standing Lending Facility rate also by 25 basis points to 7.0%. Just 18 days earlier also at an unscheduled meeting, these rates were cut by 25 basis points as well, and three cuts of 50 basis points had been engineered previously in May and August of 2019 and end-January of this year. The deposit rate had crested at 8.0% for a half year after a 75-basis point increase in November 2018. Today’s further easing “will complement the measures taken thus far to ease market conditions, and enable the domestic financial market to provide further relief to businesses and individuals affected by the outbreak of the COVID-19 pandemic and restrictions placed to contain its spread within the country.” The released statement also said that a scheduled meeting on April 9 had been canceled as a result of today’s action but reserved the future right to “review the monetary policy stance of the Central Bank and make necessary changes as and when required in consideration of economic and market developments.”

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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