COLOMBO, Apr 9 (NNN-SLN) – Sri Lanka’s central bank, yesterday, tightened its monetary policy, with a significant increase of interest rates, amid inflationary pressure.
Issuing a press release, the central bank announced the increase of the deposit facility rate and the standing lending facility rate by 700 basis points, to 13.5 percent and 14.5 percent, respectively.
The central bank said, it noted inflationary pressures that could further intensify in the period ahead, driven by the build-up of aggregate demand, domestic supply disruptions, exchange rate depreciation and elevated prices of commodities, globally.
Therefore, the bank was of the view that a substantial policy response is imperative, to preempt the escalation of adverse inflationary expectations, to provide the required impetus to stabilise the exchange rate and correct anomalies in the market interest rate structure.
Sri Lanka has for days been facing public protests, calling for immediate measures to be taken by the government, to solve the economic crisis, featuring shortages of foreign exchange, fuel and other essential supplies, as well as, rising inflation.– NNN-SLN
