Sri Lanka's central bank to maintain policy rates amid supply-driven inflation

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COLOMBO, Nov. 25 (Xinhua) -- The Central Bank of Sri Lanka (CBSL) on Thursday announced that it would maintain policy interest rates amid inflation caused by supply disruptions and global commodity price hikes.

A CBSL statement said that its Monetary Board had decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) at 5 percent and 6 percent respectively following a meeting on Wednesday.

"The board noted the recent acceleration of inflation, driven mainly by supply disruptions and the surge in global commodity prices, and reiterated its commitment to maintaining inflation at the targeted levels over the medium term with appropriate measures while supporting the economy to reach its potential in the period ahead," the statement said.

The CBSL said that Sri Lanka's economy recovered in the first half of 2021 following the monetary and fiscal stimulus. The end of lockdowns and a successful vaccination program are expected to help achieve 5 percent real GDP growth in 2021.

Sri Lanka's merchandise export revenue has surpassed 1 billion U.S. dollars for five months this year. The country's gross official reserves stood at 2.3 billion U.S. dollars in October, not counting an approximately 1.5 billion U.S. dollar swap facility with the People's Bank of China.

Headline inflation as measured by the Colombo Consumer Price Index reached 7.7 percent in October, above the CBSL's target range of 4 to 6 percent. Enditem

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