Sri Lanka to retain monetary policy stance: Central Bank

The Monetary Board of the Central Bank of Sri Lanka (CBSL) has indicated that it would maintain the present monetary policy stance – given the prevailing domestic economic conditions and financial market – based on the monetary policy review that was released recently.

With the aim of stabilising inflation within the favourable range of four to six percent while supporting economic growth to reach its potential over the medium term, the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) of the Central Bank are to remain at seven percent and eight percent respectively.

Results indicate that the Sri Lankan economy has grown at a slower rate of 1.6 percent year on year in the second quarter of 2019 compared to a growth of 3.7 in the preceding quarter.

Moreover, CBSL observes a notable slowdown in the performance of services, agriculture and industry related activities in the second quarter.

And while tourist arrivals appear to be recovering, workers’ remittances are said to be moderating.

The Central Bank says: “At present, the measures that have been put in place during the past 12 months are sufficient to achieve the desired outcomes given adequate time for their transmission through the financial sector.”