Sri Lanka reduces coverage charges by 50 bps to spice up progress By Reuters

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© Reuters. Individuals stroll previous the primary entrance of the Sri Lanka’s Central Financial institution in Colombo, Sri Lanka March 24, 2017. REUTERS/Dinuka Liyanawatte/File Picture

By Uditha Jayasinghe

COLOMBO (Reuters) – Sri Lanka’s central financial institution lowered rates of interest by 50 foundation factors in an sudden transfer on Tuesday because it centered on boosting progress prospects to steer the island nation out of its worst monetary disaster in a long time.

The Central Financial institution of Sri Lanka (CBSL) diminished the Standing Deposit Facility Fee to eight.50% and the Standing Lending Facility Fee to 9.50%, it mentioned in a press release.

The central financial institution has now slashed rates of interest by a complete 700 foundation factors since final yr as Sri Lanka’s financial system started a painful restoration from its worst monetary disaster since independence from the British in 1948.

“The Board arrived at this choice following a complete evaluation of present and anticipated home and worldwide financial developments, to keep up inflation on the focused stage of 5% over the medium time period, whereas enabling the financial system to achieve its potential,” CBSL mentioned.

The central financial institution had saved its coverage charges unchanged in January to tame inflation after a 3% gross sales tax enhance at the beginning of the yr pushed up costs and boosted inflation to five.9% in February.

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