Be the First to Know

lanka matrimony

Lanka raises rates, relaxes currency band to secure IMF funds

0 74

Sri Lanka’s central bank has raised interest rates to tackle inflation and said it would relax its currency band to move towards a market-determined exchange rate as it seeks to secure a bailout from the International Monetary Fund. On Friday, the bank raised its standing deposit facility rate and standing lending facility rate by 100 basis points each to 15.5 percent and 16.5 percent, respectively, it said in a statement.

The country is awaiting approval of a $2.9bn IMF bailout package as it endures its worst financial crisis since its independence from the United Kingdom in 1948.

Central bank Governor P Nandalal Weerasinghe said with the rate increase all “prior actions” have been fulfilled and he was hopeful of the IMF bailout being approved within this month. Despite the increase in rates, the central bank expects market rates will continue to reduce, while, on the currency front, the country will gradually move towards a market-driven exchange rate regime, Weerasinghe added.

To that end, he said guidance on the currency band would be removed from next Tuesday.

The bank has been gradually widening the band throughout this week, to 10 rupees on either side of the spot rate for Friday.

SOURCE: AL JAZEERA

 

Tuesday, March 7, 2023 – 01:00











Leave A Reply

Your email address will not be published.