Sri Lanka cuts key rates as inflationary pressures ease

People walk past the main entrance of the Sri Lanka’s Central Bank in Colombo, Sri Lanka. REUTERS/Dinuka Liyanawatte/File hpoto

COLOMBO – Sri Lanka’s central bank cut its key rates by 200 basis points on Thursday, in line with expectations, as inflation continued to slow and focus returned to reviving economic growth following the bailout secured from the International Monetary Fund.

The Central Bank of Sri Lanka (CBSL) cut its standing deposit facility rate and standing lending facility rate to 11 percent and 12 percent, respectively, from 13 percent and 14 percent previously.

The island nation plunged into crisis last year as its foreign exchange reserves ran out, food and energy prices spiraled and protesting mobs forced the ouster of the then president of the South Asian country.

President Ranil Wickremesinghe took the reins in July and negotiated a $2.9-billion bailout from the International Monetary Fund (IMF) in March.