COLOMBO (Reuters) – Sri Lanka’s central bank is likely to keep interest rates on hold on Thursday in a bid to rein in inflation, which remains low despite a sharp rise Not too high.
Nine out of 14 economists and analysts polled by Reuters said they expect interest rates to remain in place Unchanged The Central Bank of Sri Lanka (CBSL) waited for the impact of its previous interest rate hike to seep into the economy and for inflation to stabilize as the economy cools.
“The pace of inflation appears to be slowing, but it is also largely cost-push inflation caused by depreciation and global commodity prices, and rate hikes will have limited impact on this,” Director Dimantha Mathew said he conducted research for Colombo-based investment firm First Capital. the country’s economic woes.
However, inflation has remained high, reaching a record 68.9% in September, while food inflation climbed to .7%.
Sri Lanka’s economy shrank 8.4% in the quarter ended June from a year earlier, one of the sharpest declines in three months, The reason is a shortage of fertilizers and fuel. The central bank forecasts 2022 that the economy will contract by 8.7%.
Severe dollar shortages have left Sri Lanka struggling with its worst financial crisis in seven years and struggling to pay for imported food, fuel and medicines.
Maintaining interest rates at current levels will also help ensure demand does not push up imports, which Sri Lanka will struggle to pay given its low foreign exchange reserves, Mathew said.
Monetary authorities left interest rates unchanged in their last policy announcement in 18 August. The standing deposit facility interest rate and the standing loan facility interest rate are 14.50% and 14. 50%, respectively.
Sri Lanka struck a staff-level deal with the International Monetary Fund (IMF) last month for a $2.9 billion bailout, but must figure out how to restructure its heavy debt load , before funds can be disbursed.
Organization SDFR 6 October SLFR 6 October
CT CLSA 14 .50% 15.50%
Acuity14.50% 93 .68%
Rehana Thowfeek 15 %-% 16%-17%
CAL group.50% 15.50%
Asia Securities 93 .68% 18.50%
Capital One14.50% 16.18%
Asha Securities 2022 .18% 15.50%
Capital 16 % 18 %
NDB I Investment 14.14% 15 ).50%
the University14.50% 15.50%
JB Securities 15% 17%
cutting edge.50 % 16. 50%
CSE 15.17% ). 50%
standard15 .68% 16.50%