Central Bank maintains policy interest rates at their current levels

The Monetary Policy Board of the Central Bank of Sri Lanka, at its meeting held on 26 September 2024, 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 8.25 per cent and 9.25 per cent, respectively.

The Board arrived at this decision after carefully considering the recent and
expected macroeconomic developments and possible risks and uncertainties on the domestic and global fronts with a view to ensuring that inflation aligns with the target of 5 per cent over the medium term, while enabling the economy to reach its maximum potential.

The Board observed that inflation is likely to remain well below the target of 5 per cent over the next few quarters, potentially recording deflation in the immediate future driven by changes to administratively determined prices and easing of supply conditions.

Meanwhile, despite intermittent volatility, the Sri Lanka rupee appreciated against the US dollar by over 7 per cent thus far during 2024, and the Central Bank purchased a significant amount of foreign exchange from the domestic market to bolster Gross Official Reserves (GOR). GOR stood at US dollars 6.0 billion (including the swap facility from the People’s Bank of China) at end August 2024.