Sri Lanka holds rates steady to rein in inflation, as expected

COLOMBO : Sri Lanka’s central bank held interest rates steady for a third straight meeting on Wednesday, as widely expected, saying the prevailing tight monetary stance is critical to reining in inflationary pressures.

The Central Bank of Sri Lanka had increased rates by a massive 950 basis points between August 2021 to July 2022 to tame stubbornly high inflation.

The Standing Lending Facility rate was held steady at 15.50 per cent while the Standing Deposit Facility Rate was kept unchanged at 14.50 per cent. Rates continue to stand at their highest levels since August, 2001.

Thirteen out of 14 economists and analysts polled by Reuters expected CBSL to hold rates.