Sri Lanka Interest Rate

The Central Bank of Sri Lanka kept its benchmark interest rates unchanged at 8.25% during its September meeting, as widely expected. This decision followed a 25bps rate cut in July, as the board anticipated that inflation may remain well below the target of 5% over the next few quarters, potentially leading to deflation in the immediate future due to changes in determined prices and easing supply conditions. On the GDP front, the economy is expected to recover further, likely growing by 4.7% yoy in Q2 of 2024 after a 5.3% expansion in Q1. The latest economic indicators suggest that the robust growth in the first half of 2024 is likely to continue through the rest of the year, resulting in higher growth than initially projected. The board mentioned it will continue to monitor and assess factors affecting inflation and economic variables before making adjustments to its monetary policy. The central bank also maintained the Standing Lending Facility Rate at 9.25%