COLOMBO (Reuters) – Sri Lanka’s central bank held interest rates steady on Thursday as widely expected, saying monetary conditions remain “sufficiently tight” after a massive rate-hike campaign earlier in the year to tame stubbornly high inflation.
The Standing Lending Facility rate was held steady at 15.50% while the Standing Deposit Facility Rate was kept unchanged at 14.50%.
Nine out of 14 economists and analysts polled by Reuters had said they expect rates to remain unchanged.
“Monetary conditions remain sufficiently tight to achieve the envisaged disinflation path in the period ahead,” CBSL said in its statement.
“The contractionary fiscal policies would complement the effects of tight monetary policy measures already in place, helping to mitigate any build-up of aggregate demand pressures, thereby anchoring inflation expectations and bringing down headline inflation to the targeted level of 4-6% over the medium term,” they added.
(Reporting by Uditha Jayasinghe and Swati Bhat; Editing by Shri Navaratnam)
