The Central Bank has decided to reduce the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) to 11% and 12% respectively.
That is according to the policy decision taken by the Monetary Board of the Central Bank of Sri Lanka to reduce the interest rates by 200 basis points (bps) in the meeting held on 05 July 2023.
The decision was taken by the Board after a careful analysis of current and expected developments with an aim to stabilize inflation.
The central bank expects the new rulings to ease pressure on financial markets, bringing inflation to mid-single digit levels in the medium term.
With this 200 bps cut in policy rates and a 250 bps cut in policy rates in early June 2023, The Finance Board expects that with the significant reduction in risk premiums on government securities seen recently, market interest rates, especially debt rates, will fall sufficiently and rapidly.
Therefore, the central bank urges the banking and financial sector to pass on the benefits of this significant monetary policy easing to individuals and businesses.
The central bank also said that this would help to restore economic activities in the coming period.
