Sri Lankan Interest Rate Cut – Currency Thoughts

Sri Lankan Interest Rate Cut

May 22, 2025

The Central Bank of Sri Lanka also reduced its policy interest rate by 25 basis points from 8% to 7.75%. In light of a rise in Sri Lankan consumer price deflation of -2.0% in April versus -4.2% just two months earlier, analysts were not expecting a cut. The previous two moves were done last November in in July 2024. Officials anticipate that inflation will turn positive again quite soon and believe that gradual and measured cuts remained appropriate for “steering inflation towards the target of 5%” eventually. The new rate levels of 7.75% is half the peak of 15.5% in the second quarter of 2023. Sri Lankan inflation crested at 67.4% in September 2022.

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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on Thursday, May 22nd, 2025 at 8:31 am and is filed under Central Bank Watch.
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