The Central Bank of Sri Lanka continues its accommodative monetary policy stance The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 19 August 2020, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 4.50 per cent and 5.50 per cent, respectively.
The Board 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 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.
Global monetary easing continued amidst the rapid spread of the COVID-19 pandemic the rapid spread of the COVID-19 pandemic and related containment measures have resulted in a significant downturn in the global economy in the first half of the year.
A noticeable decline in market lending rates was observed in July 2020 in response to the series of policy and regulatory measures adopted by the Central Bank thus far in 2020.
(LIN)