Sri Lanka’s consumer prices in the capital Colombo increased by 2.4% in the 12 months to July 2024. However, the central bank’s deflationary policy, which began impacting the balance of payments in September 2022, has only resulted in a 2.8% rise over the past 22 months. In July, the Colombo Consumer Price Index (CPI) fell
The Central Bank has reduced its key policy rates by 25 basis points, bringing the Standing Lending and Deposit Facility rates to 9.25% and 8.25%, respectively. This adjustment, while largely symbolic, underscores the Bank’s commitment to an easing monetary policy. Since shifting to a more relaxed policy stance in June 2023, the Central Bank has
The Monetary Policy Board of the Central Bank of Sri Lanka has announced a reduction in both the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 25 basis points each. Effective July 22, 2024, the new rates are 8.25% for the SDFR and 9.25% for the SLFR. This decision follows
On Wednesday, the Colombo Stock Exchange experienced a slight uptick following the central bank’s policy rate cut earlier in the day. The All Share Index (ASPI) rose by 0.90%, or 104.45 points, to close at 11,701, while the more liquid S&P SL20 Index increased by 1.35%, or 45.40 points, ending at 3,414. Despite the positive
Sri Lanka’s credit to the private sector has expanded by Rs. 146 billion in the first half of 2024, with a notable increase of Rs. 74 billion in June alone, according to data from the Central Bank. This represents a 2% expansion in private credit for the first half of the year, which is lower
Sri Lanka will provide interest relief for pawn advances up to Rs. 100,000, as announced by Cabinet Spokesperson Minister Bandula Gunawardena. This measure is aimed at assisting low-income families struggling with high interest rates on pawning advances. The Cabinet has approved a program through the General Treasury to grant interest relief of up to 10%
Sri Lanka’s central government net debt decreased to 36.3 billion USD in 2023, down from 37.5 billion USD in 2022, despite borrowing 1.57 billion USD to finance the budget deficit, according to official data. The reduction in net debt occurred as the central bank did not print money to enforce policy rates, eliminating forex shortages
In June 2024, Sri Lanka’s central bank was a net seller in the foreign exchange market, selling $57 million to banks without purchasing any dollars. This follows a previous trend where the central bank bought $224.5 million and sold $32 million in May. The build-up of excess liquidity reached 200 billion rupees due to dollar
Sri Lanka and its sovereign bondholders have come to an agreement to exchange $14.43 billion in defaulted bonds and overdue interest for new instruments tied to future GDP growth, governance, and standard fixed interest bonds. Bondholders have consented to an 11% haircut on $1.889 billion of overdue interest, as opposed to an earlier proposal, according