The Monetary Board of the Central Bank of Sri Lanka today, decided to increase its Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 700 basis points to 13.50 per cent and 14.50 per cent, respectively.
The Central Bank said the Monetary Board made this policy response was made after having noted the inflationary pressures that could further intensify in the period ahead, driven by the build-up of aggregate demand, domestic supply disruptions, exchange rate depreciation and the elevated prices of commodities globally,
The monetary board was of the view that a substantial policy response is imperative to arrest the buildup of added demand driven inflationary pressures in the economy and preempt the escalation of adverse inflationary expectations,
The Central Bank said these steps were necessary to provide the required impetus to stabilise the exchange rate and also to correct anomalies observed in the market interest rate structure.
The bank said that a detailed media release will be issued in due course.
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