(LANKAPUVATH | COLOMBO) – Sri Lanka’s Central Bank today said it has decided to increase both the deposit rate and the lending rate by 100 basis points each after carefully considering the current and expected macroeconomic developments both globally and domestically.
Accordingly, the Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 03 March 2022, reinforcing its stance adopted in January 2022, has decided to increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) to 6.50 percent and 7.50 percent, respectively.
Statutory Reserve Ratio (SRR) meanwhile, remains unchanged at 4.00%.
In addition, the Monetary Board has decided to revise upwards the caps imposed on interest rates applicable to credit cards to 20 percent per annum, on pre-arranged temporary overdrafts to 18 percent per annum, and on pawning facilities to 12 percent per annum. Directions to effect these regulated interest rates will be issued shortly.
The Monetary Board was of the view that the above measures will dampen the possible build-up of underlying demand pressures in the economy, which would, in turn, help ease pressures in the external sector, thus promoting greater macroeconomic stability.
The Board is of the view that at the same time, concerted efforts will need to be urgently taken by the Government to complement the efforts taken by the Central Bank to overcome the present economic challenges.
The Central Bank said it will continue to closely monitor the emerging macroeconomic and financial market developments, both globally and domestically, and will stand ready to take further measures as appropriate, with the aim of achieving stability in the fronts of inflation, the external sector and the financial sector, thereby supporting real economic activity on a sustained basis.
Standing Deposit Facility Rate (SDFR) – 6.50%
Standing Lending Facility Rate (SLFR) – 7.50%
Bank Rate (automatically adjusted with SLFR) – 10.50%
Maximum interest rate on Credit Cards – 20.00%
Maximum interest rate on Pre-arranged Temporary Overdrafts – 18.00%
Maximum interest rate on Pawning Facilities – 2.00%
