Mar 05, 2020 (LBO) – The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 04 March 2020, 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 6.50 percent and 7.50 percent, respectively, and thereby continue its accommodative monetary policy stance.
The Board arrived at this decision following a careful analysis of the current and expected developments in the domestic economy and the financial market as well as the global economy.
The decision of the Monetary Board is consistent with the aim of maintaining inflation in the 4-6 per cent range while supporting economic growth to reach its potential over the medium term.
Many economies are becoming increasingly accommodative amidst global growth concerns The escalation of the coronavirus (COVID-19) outbreak to a ‘global health emergency’ and its potential to become a pandemic pose significant threats to global economic recovery in 2020.
The widespread impact on China, the world’s second largest economy, will have spillover effects on the global economy through weakening trade, tourism and investment flows.
The recent rapid rise in cases outside China highlights the high degree of health and economic contagion that the outbreak entails.
Policymakers around the globe are expected to intensify policy support to address the effect of the outbreak on global demand and supply conditions, while monetary policies in both advanced economies and emerging market and developing economies are projected to be relaxed at a faster pace than previously envisaged.