Sri Lanka’s Central Bank Monetary Board maintains policy rates to support economic recovery
The Monetary Board of the Central Bank of Sri Lanka (CBSL) has reportedly kept policy rates unchanged in a bid to continue with its support for the recovery of the economy amidst a worsening Covid-19 pandemic.
The Board has reportedly stated that it had arrived at this decision after carefully considering the macroeconomic conditions and expected developments on the domestic and global fronts.
“In the context of the prevailing low inflation environment and well anchored inflation expectations, and the renewed challenges posed by the third wave of the Covid-19 pandemic, the Board remains committed to maintaining the current accommodative monetary policy stance to support the sustained revival of the economy,” a statement issued by the Central Bank has noted.
It has further emphasised that the third wave of the Covid-19 pandemic has disrupted the ongoing recovery of economic activity.
“The Central Bank will continue to monitor domestic and global macroeconomic and financial market developments and stand ready to take proactive measures to help the economy to sustain the growth trajectory, while maintaining inflation in the targeted 4-6% range under the flexible inflation targeting framework,” the statement has added.
The bank has noted that the economy, which rebounded notably during the second half of 2020 and early 2021 as per available indicators is experiencing, renewed disruptions due to the emergence of the third wave of the Covid-19 pandemic and related preventive measures, including isolations.
According to the Central Bank, the external sector remains resilient despite a multitude of challenges.
“The merchandise trade deficit widened in March, driven by a higher increase in expenditure on imports than the increase in earnings from exports,” the CBSL has stated.
The notable increase in workers’ remittances had continued during the period from January to April, over the corresponding period of the previous year.
OSL take:
Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is once again on the path to recovery after facing the impact of the global Covid 19 pandemic. The positive movements in Sri Lanka’s key economic sectors in the country have opened up many business/investment opportunities in the country. Sri Lanka’s ongoing development programme has also helped boost the business/investment opportunities in the country.
| Article Code : | VBS/AT/20210528/Z_3 |