January 30, 2020 / 2:22 AM / a month ago

Sri Lanka central bank cuts key interest rates

MUMBAI, Jan 30 (Reuters) - The Central Bank of Sri Lanka cut both its key interest rates by 50 basis points at its monetary policy review meeting on Thursday, citing the need to support a recovery in domestic growth in the backdrop of a favourable inflation outlook.

The standing deposit facility rate (SDFR) and standing lending facility rate (SLFR) were both reduced to 6.50% and 7.50%, respectively.

Headline inflation, as measured by the year-on-year change in Colombo Consumer Price index (CCPI), accelerated in December owing to domestic supply disruptions.

"In spite of such short term fluctuations, the near term forecast suggests that inflation will hover below 5% in 2020, and stabilise between 4%-6% thereafter, assisted by appropriate policy measures and underpinned by well anchored inflation expectations," the policy statement said. (bit.ly/2O9GNMg) (Reporting by Swati Bhat; Editing by Shounak Dasgupta)

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