The Central Bank (CB) will have a single policy interest rate mechanism in the near future, said Central Bank Governor Dr. Nandalal Weerasinghe on Friday at their monetary policy meeting.
This will help to further spur economic growth as it will give easy access to credit at low interest.
He said that according to available data the economy is estimated to have grown by 4.7% (year-on-year) in Q2 2024, following an expansion of 5.3% (year-on-year) recorded in Q1 2024 and this positive sentiment is likely to continue through the remainder of the year resulting in a higher growth for 2024 than initially projected.
Earnings from tourism and workers’ remittances improved, strengthening the external current account.
From January to August 2024 Tourism netted USD 2.2 billion, while during the same period foreign remittances were at USD 4.3 billion.
Meanwhile the Monetary Policy Board of the Central Bank, at its meeting held on September 26, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 8.25% and 9.25%.
The Board arrived at this decision after carefully considering the recent and expected macroeconomic developments and possible risks and uncertainties on the domestic and global fronts with a view to ensuring that inflation aligns with the target of 5 per cent over the medium term, while enabling the economy to reach its maximum potential.
The Board observed that inflation is likely to remain well below the target of 5 per cent over the next few quarters, potentially recording deflation in the immediate future driven by changes to administratively determined prices and easing of supply conditions.
