The Monetary Policy Board of the Central Bank of Sri Lanka (CBSL) has decided to keep the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) unchanged at their current levels of 9.00 percent and 10.00 percent, respectively. This decision was made after a thorough evaluation of domestic and international macroeconomic developments to maintain inflation at the targeted level of 5 percent over the medium term, while also supporting economic growth.
The Central Bank recognized the potential inflationary pressures stemming from recent taxation and supply-side factors. However, the Board concluded that these developments would not significantly alter the medium-term inflation outlook. Additionally, the previous monetary policy easing measures and the decrease in risk premia for government securities have created space for further reduction in market lending interest rates.
Emphasizing the importance of passing on the benefits of lower interest rates to businesses and individuals, the Central Bank urged financial institutions to promptly and adequately transfer these advantages to their clients. This would contribute to supporting economic activity and stimulating growth.
The decision to maintain policy rates unchanged reflects a prudent approach by the Central Bank in carefully weighing various economic factors. By keeping the rates steady, the Central Bank aims to balance the need for managing inflation with supporting economic expansion.
In conclusion, the Central Bank of Sri Lanka has decided to maintain the SDFR and SLFR rates at their current levels, taking into account the domestic and international macroeconomic conditions. The Board remains committed to achieving the targeted inflation rate while facilitating economic growth. Financial institutions are expected to play their part in passing on the benefits of lower interest rates to businesses and individuals. Moving forward, the Central Bank will continue to monitor developments closely to ensure stability and progress for the Sri Lankan economy.
