Category: Policy
CBSL maintains policy rates; further acceleration of headline inflation expected
The Monetary Board of the Central Bank has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 5.00 percent and 6.00 percent, respectively. The Board noted the recent acceleration of inflation, driven mainly by supply disruptions and the surge […]
Is wealth tax the solution to Sri Lanka’s low tax revenue collection?
By Sathya Karunarathne IntroductionSuccessive governments have run fiscal deficits. Inadequate revenue collection and unrestrained government expenditure have worsened the country’s fiscal position. Tax revenue which averaged over 20% of GDP in 1990 has declined to under 10% of GDP inAd hoc tax policy changes have significantly eroded the tax base. Weak tax administration has also […]
Monetary Policy Consultative Committee reconstituted
The Monetary Policy Consultative Committee (MPCC) of the Central Bank has been reconstituted with effect from 5 October 2021. The reconstituted MPCC comprises 12 eminent personalities from the private sector and academia and is chaired by Sunil Lankathilake, Former Deputy Governor of the Central Bank of Sri Lanka and a Member of the Securities and […]
CBSL maintains policy rates; near term supply side developments do not warrant policy tightening
The Monetary Board has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 5.00 percent and 6.00 percent, respectively. The Board said it arrived at this decision after considering the macroeconomic conditions and expected developments on the domestic and […]
Central Bank may consider maintaining policy stance: First Capital Research
First Capital Research believes that the Central Bank may consider maintaining the same policy stance in this policy review but given the considerable improvement in high-frequency indicators to prevent an overheating of the economy, there is a considerably high probability that CBSL may hike its policy rates. “We believe that there is a significant probability […]
Sri Lanka projected to grow by 3.3-pct : Shifting gears to services-led growth can help build back better
Sri Lanka’s economy is projected to grow by 3.3 percent in 2021, but the medium-term outlook is clouded by pre-existing macroeconomic weaknesses and the economic scarring from the COVID-19 pandemic. A gradual recovery will likely lead to corresponding improvements in labor market conditions. Most countries in South Asia are far from pre-pandemic trend levels, says […]
Sri Lanka official reserves slightly improve to USD 3.6bn by end August
Sri Lanka’s gross official reserves were 3,550.7 million US dollars by the end of August, up from 2,805.9 million US dollars in July, the latest Central Bank data showed. This does not include the swap facility signed with the People’s Bank of China (PBoC) of RMB 10 bn (equivalent to approximately USD 1.5 bn). By […]
Government must take meaningful steps without compromising international friendship: Eran
With the corona epidemic and mismanagement of the economy, the country is now facing a Trinity of crises which cannot be cured by this government due to its intrinsic nature of mismanagement said Samagi Jana Balawegaya MP Eran Wickramaratne. Addressing a press conference held at the Opposition Leader’s Office in Colombo today, the Member of […]
CBSL tightens monetary policy to curb inflationary pressures; rectify external sector imbalances
Sri Lanka’s Central Bank has tightened its monetary policy stance to address the imbalances in the external sector and to preempt the buildup of excessive inflationary pressures over the medium term. Accordingly, the Monetary Board of the Central Bank has decided to increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate […]
Only 10-pct probability for a rate hike at upcoming policy review: First Capital Research
First Capital Research believes that there is a significant probability (90%) to hold policy rates due to the considerable improvement in high-frequency indicators with the fiscal and monetary measures implemented so far. However, there is a 10% probability for a 25bps rate hike to balance external pressure. “As per our view, CBSL either can choose […]
CBSL expects 5-pct GDP growth in 2021; inflationary pressures to be addressed with policy intervention
The Monetary Board of the Central Bank has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 4.50 percent and 5.50 percent, respectively. According to the Central Bank, the economy is likely to have recorded a higher than expected […]
‘s Central Bank inching towards taper tantrum: First Capital Research
First Capital Research believes that there is a 95% probability for policy rates to remain unchanged at the next monetary policy meeting due to the measures taken by CBSL to stimulate the economy. CBSL either can choose to hold policy rates steady or hike by 25 bps while rate cut is off the table due […]