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Aug 20, 2020

CBSL to continue its accommodative monetary policy stance

The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 19 August 2020, has decided to maintain the SDFR and the SLFR at their current levels.

The Board has recognised the necessity to continue the accommodative monetary policy stance, particularly as market lending rates are yet to reflect the full passthrough of policy easing measures implemented thus far.

The Board has also decided to adopt targeted measures to reduce specific interest rates that it considered to be excessive, which would help marginal borrowers.

The Board anticipates a further reduction in overall market lending rates, thereby encouraging borrowing for productive economic activity and reinforcing support for COVID-19 hit businesses as well as the broader economy, given the conditions of subdued inflation.

The release of the next regular statement on monetary policy will be on 08 October 2020.

Policy rates and SRR unchanged.

Standing Deposit Facility Rate (SDFR) – 4.50%
Standing Lending Facility Rate (SLFR) – 5.50%
Bank Rate – 8.50%
Statutory Reserve Ratio (SRR) – 2.00%

(LBO)

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