Sri Lanka’s central bank lowered its two key interest rates by a further 25 basis points at a second unscheduled monetary policy meeting, saying the move should help ease market conditions and provide further relief to businesses and households affected by the outbreak of the coronavirus and the restrictions put in place to contain its spread.
The Central Bank of Sri Lanka (CBSL) cut its Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) to 6.0 percent and 7.0 percent respectively.
CBSL was the first central bank worldwide to lower its rate in January in response to the growing economic uncertainty surrounding the outbreak of COVID-19 in China.
At its scheduled policy meeting on March 4, the central bank maintained its rate but at an urgent meeting on March 16 it then lowered the rates by 25 basis points along with a 100 point cut in its reserve ratio “in light of the urgent need to support economic activity with the rapid spread” of the virus.
CBSL has now cut its policy rates five times and by a total of 200 basis points since May 2019.
The central bank said there would not be a monetary policy announcement on April 9, as scheduled, but the policy stance may be reviewed and changed if necessary “as and when required.”
The Central Bank of Sri Lanka issued the following statement: