June 6, 2023

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Sri Lanka raises policy rates by 100 bps as seeks to finalise IMF bailout By Reuters

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COLOMBO (Reuters) – Sri Lanka’s central bank raised interest rates in an unexpected move on Friday, to help finalise an International Monetary Fund’s Extended Fund Facility (EFF) arrangement, it said in a statement.

The bank raised its standing deposit facility rate and standing lending facility rate by 100 basis points each to 15.50% and 16.50%, respectively.

The country is awaiting approval of a $2.9 billion IMF bailout package.

Its economy has been squeezed by its worst financial crisis since independence from Britain in 1948, with growth contracting by an estimated 9.2% last year amid soaring inflation that hit 50% in February.

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