{"id":148712,"date":"2025-03-26T16:25:28","date_gmt":"2025-03-26T23:25:28","guid":{"rendered":"https:\/\/www.lankaweb.com\/news\/items\/?p=148712"},"modified":"2025-03-26T16:25:28","modified_gmt":"2025-03-26T23:25:28","slug":"sri-lankas-central-bank-chief-says-policy-rate-is-appropriate","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2025\/03\/26\/sri-lankas-central-bank-chief-says-policy-rate-is-appropriate\/","title":{"rendered":"Sri Lanka\u2019s Central Bank chief says policy rate is appropriate"},"content":{"rendered":"<h2><span style=\"color: #0000ff;\"><em>Courtesy Adaderana<\/em><\/span><\/h2>\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/adaderanaenglish.s3.amazonaws.com\/1743005689-CBSL.jpg\" alt=\"Sri Lanka\u2019s Central Bank chief says policy rate is appropriate\"\/><\/figure>\n\n\n\n<p>Sri Lanka\u2019s central bank governor said monetary policy is appropriate\u201d right now, as the South Asian nation\u2019s economy and inflation are moving in line with their goals.<\/p>\n\n\n\n<p>The Central Bank of Sri Lanka held the overnight policy rate at 8% for the second straight meeting this year on Wednesday. The move was in line with the forecast of most of the economists surveyed by Bloomberg.<\/p>\n\n\n\n<p>The monetary policy is transmitting into the economy nicely\u201d and inflation will come back into positive territory\u201d from the second half of the year,\u201d Governor P. Nandalal Weerasinghe told Bloomberg TV\u2019s Haslinda Amin in an interview on Wednesday. So we thought this is the right, appropriate policy stance for the time being.\u201d<\/p>\n\n\n\n<p>Sri Lanka\u2019s economy expanded 5% last year, bouncing from a contraction of 2.3% in 2023, and is expected to sustain the pace in the current year. However, the monetary authority will closely\u201d monitor the risks from the possible impact of volatile commodity prices and US President Donald Trump\u2019s tariffs, the governor said.&nbsp;<\/p>\n\n\n\n<p>A $3 billion bailout from the International Monetary Fund has helped in stabilizing Sri Lanka\u2019s cash-strapped economy. Since the historic default in 2022, authorities have raised taxes and unveiled measures to keep up with the conditions of the lender\u2019s loan program. The country needs to increase energy prices and meet fiscal parameters for further aid, the IMF recently said.&nbsp;<\/p>\n\n\n\n<p>The country will have to stay\u201d the course to meet the revenue-based fiscal consolidation targets and deliver on the promised governance reforms, Weerasinghe said.&nbsp;<\/p>\n\n\n\n<p>There\u2019s a lot of confidence and assurance from the administration that they\u2019ll move in the same direction,\u201d he said.<\/p>\n\n\n\n<p>What Bloomberg Economics Says&nbsp;<\/p>\n\n\n\n<p>The policy rate is at an appropriate level, based on our estimates of inflation and the output gap. Any easing beyond this point could cause the economy to overheat \u2014 leading to an undesirable jump in imports which would pressure FX reserves and hit the rupee. We doubt the central bank will want to risk those events.<\/p>\n\n\n\n<p>Ankur Shukla, economist<\/p>\n\n\n\n<p>Sri Lanka secured about $334 million in loans from the IMF on Feb 28. The nation is also in the process of signing debt restructuring agreements with bilateral partners in the official creditor committee such as India and members of the Paris club, the governor said.&nbsp;<\/p>\n\n\n\n<p><strong>Source: Bloomberg<\/strong><br><em>&#8211;Agencies&nbsp;<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Courtesy Adaderana Sri Lanka\u2019s central bank governor said monetary policy is appropriate\u201d right now, as the South Asian nation\u2019s economy and inflation are moving in line with their goals. The Central Bank of Sri Lanka held the overnight policy rate at 8% for the second straight meeting this year on Wednesday. The move was in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[102],"tags":[],"class_list":["post-148712","post","type-post","status-publish","format-standard","hentry","category-economy"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/148712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=148712"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/148712\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=148712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=148712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=148712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}