Sri Lanka Inflation: The Central Bank of Sri Lanka, which is going through a very bad economic crisis, has decided to increase interest rates by 700 basis points to control the ever-increasing inflation in the country. The move comes at a time when Sri Lanka’s main opposition SJB has announced a no-confidence motion against President Gotabaya Rajapaksa’s government.
700 basis point increase
The Monetary Board of Sri Lanka’s central bank decided to increase the Fixed Deposit Facility Rate (SDFR) and the Permanent Lending Facility Rate (SLFR) by 700 basis points to 13.50 per cent and 14.50 per cent, respectively. This increase has come into effect from Saturday.
inflationary pressure will increase
The monetary board said that inflationary pressure will increase in the coming times due to increased demand, disruption in domestic supply, depreciation of exchange rate and higher global commodity prices.
Will hold talks with IMF on April 11
Meanwhile, Sri Lanka will start talks with the International Monetary Fund (IMF) on April 11 for financial assistance. In the last two years, Sri Lanka’s foreign exchange funds declined by nearly 70 per cent to $1.93 billion by the end of March. Inflation also rose to 18.7 per cent in March.