COLOMBO: Sri Lanka's Central Bank kept key policy rates steady at record lows for a 14th straight month on Wednesday, as expected, and said the low interest rate environment is expected to continue benefiting from low inflation levels.
It left the standing deposit facility (SDF) rate and the standing lending facility rate (SLFR) unchanged at 6.50 percent and 8.00 percent, respectively. The commercial banks' statutory reserve ratio was unchanged at 6.00 percent. A Reuters poll had expected the rates to be left unchanged.
The central bank early this month tightened monetary policy by scrapping a 5 percent lower repo rate penalty rate paid to banks which use SDFR more than three times a month. "Given signs of a sustained increase in credit flows to the private sector, the central bank removed the restriction placed on the access to its Standing Deposit Facility (SDF)," the bank said in a statement.
Private sector credit grew at 11.5 percent year-on-year in January compared to a 8.8 percent in December, the central bank said.