Colombo, April 9 (NewsWire) – Sri Lanka’s central bank doubled its key interest rates on Friday, raising each by an unprecedented 700 basis points to control inflation that has soared.
The build-up of aggregate demand, domestic supply disruptions, the plunge of the local currency and high prices of commodities globally could keep up the pressure on inflation, CBSL said in its monetary policy decision statement.
Meanwhile, New Central Bank Governor Nandalal Weerasinghe had his maiden press briefing today.
Follows are five key remarks he made.
- The new rate hike will give a strong signal to investors and markets that we are coming out of this as soon as possible
- New Governor said that he wanted to run the central bank independently without any external influence and that he had been given the authority to do so by the president and has been asked to expedite measures to get the country out of the current crisis.
- “I want to be very clear that my message is not one of blind positivity. Things are challenging and we need to take decisive action. Things will get worse before they get better, but we need to apply the breaks to this vehicle before it crashes,”
- “I can’t go back and reverse what has happened but will use all my experience including exposure to multilateral partners such as IMF and World Bank to serve the people. I came to serve the people of the country and not any politician”
- Debt restructuring work as required by the President has not taken place adequately. Therefore this would be attended immediately: A virtual meeting has been requested for 11th April with IMF. Letter of Intent to IMF is to be presented later, it will follow the technical process