Central Bank continues its accommodative monetary policy stance

Oct 22, 2020 (LBO) – The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 21 October 2020, has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) at their current levels of 4.50 percent and 5.50 percent, respectively, thereby continuing the prevailing accommodative monetary policy stance.

The Board noted the decline in overall market lending rates, following the unprecedented monetary easing measures taken by the Central Bank thus far during the year, and expects the broadbased downward adjustment in market lending rates to continue, thereby ensuring affordable credit flows to productive sectors of the economy in the prevailing low inflation environment.

The Central Bank said it will continue to monitor domestic and global macroeconomic and financial market developments and take further measures appropriately to ensure that the economy promptly reverts to a sustained high real GDP growth path, while maintaining inflation in the 4-6 per cent range under its flexible inflation targeting framework.

The release of the next regular statement on monetary policy will be on 26 November 2020.

Monetary Policy Decision: Policy rates and SRR unchanged
Standing Deposit Facility Rate (SDFR) 4.50%
Standing Lending Facility Rate (SLFR) 5.50%
Bank Rate 8.50%
Statutory Reserve Ratio (SRR) 2.00%