The Monetary Board of the Central Bank of Sri Lanka (CBSL) decided to maintain the policy interest rates of the Bank at the current levels.
“The Board observed the stronger than expected growth performance towards the end of 2020 and underscored the need for maintaining the prevailing low-interest rate structure to support the sustained economic recovery in the period ahead.
The Central Bank will continue to monitor domestic and global macroeconomic and financial market developments and stand ready to take proactive measures to help the economy to sustain the growth trajectory while maintaining inflation in the targeted 4-6 percent range under the flexible inflation targeting framework,” the CBSL announced in a Statement.
The Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the CBSL stands at 4.50 percent and 5.50 percent
Reflecting the impact of monetary policy easing measures adopted thus far, the CBSL noted that most market interest rates declined to their historic lows.
However, it stated that some upward pressure on yields on government securities was observed recently, in contrast to monetary policy expectations.
“Thus, the Central Bank reiterates the necessity to maintain the low-interest rate structure, amidst the significantly high excess liquidity in the domestic money market, thereby facilitating the take-off of domestic investment,” it added.