Sri Lanka holds rates to manage inflation, foster economic stability
COLOMBO - Sri Lanka's central bank held interest rates steady on Tuesday to ensure inflation pressures remain in check as authorities look to foster economic stability and lift growth following the South Asian nation's worst financial crisis in decades.
Sri Lanka's key annual inflation rate was at 1.5% in April, down from 6.4% at the start of the year, and prices appear well anchored, the central bank said in a statement. Space remains for market lending interest rates to decline further given the prevailing accommodative monetary policy stance, the CBSL said, reiterating to lenders the need to pass on the benefits of lower rates to borrowers without further delay.
The island's economy shrank 7.3% in 2022 and 2.3% last year after a record shortfall of dollar reserves and huge debt sparked a severe financial crisis.
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