The Monetary Board of the Central Bank of Sri Lanka in its meeting held yesterday (23) decided to reduce the Subsidiary Deposit Facility Rate (SDFR) by 0.25% from 8.5% to 8.25% and the Subsidiary Lending Facility Rate (SLFR) by 0.25% from 9.5% to 9.25%.
Accordingly, the central bank has requested the financial institutions to take appropriate measures to reduce the market interest rates in order to provide the benefits to the public.
In this regard, the notification issued by the Central Bank further states that,
The Council took this decision after careful assessment of current and expected macroeconomic developments and potential risks and uncertainties in relation to domestic and global conditions, with a view to maintaining inflation at the targeted level of 5 percent over the medium term, while enabling the economy to reach its full potential.
In taking this decision, the Council considered the need to trigger a further reduction in market lending rates to support economic activity thereby signaling the continuation of an accommodative monetary policy stance amid a subdued inflation outlook.
Based on available information, inflation may continue to remain below the 5 percent inflation target for the next few months with a significant gap before aligning with the medium-term target level, the Council indicated.
The complete notification of the Central Bank of Sri Lanka in this regard is as follows…
