Sri Lanka likely to resume rate cuts Thursday to spur growth

Reuters – Sri Lanka’s central bank is expected to resume interest rate cuts on Thursday (05) as it attempts to bolster a recovery from its worst economic crisis in decades, capitalising on low inflation to complete the first review of a $2.9 billion IMF bailout package.

The median estimate in a Reuters poll of 17 economists and analysts is for a 100-basis-point (bps) cut in both the Standing Deposit Facility Rate and the Standing Lending Facility rate, taking them to 10% and 11%, respectively.

“We are sort of pushing towards a rate cut. Any more delays might be too late since we only have one more policy rate decision this year,” said Dimantha Mathew, head of research at First Capital.

“Definitely over the next six months we expect rates to be cut by 200 bps points: This time 100 bps with the next 100 bps coming in the next quarter.”

The Central Bank of Sri Lanka (CBSL) has already reduced rates by 450 bps in two moves over June and July after raising them by a record 1,050 bps from March 2022 to counter the island’s worst financial crisis in over seven decades.

The post Sri Lanka likely to resume rate cuts Thursday to spur growth appeared first on Adaderana Biz English | Sri Lanka Business News.