The Central Bank of Sri Lanka (CBSL) has kept its key interest rates unchanged but imposed caps on lending rates in some segments.
The Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the CBSL remain at 11.00% and 12.00%, respectively.
The CBSL said that the decision to keep the key rates unchanged was taken following a careful assessment of the current and expected economic conditions.
However, the CBSL also announced that it has imposed caps on interest rates on pawning facilities, pre-arranged overdrafts, and credit cards.
The interest rate cap for pawning facilities is 18% per annum, while the cap for pre-arranged overdrafts is 23% per annum. The cap for credit cards is 28% per annum.
The CBSL said that the caps were imposed because interest rates on certain lending products remain “excessive” and the downward adjustment in some sectors was “inadequate”.
The CBSL Governor, P. Nandalal Weerasinghe, said that the CBSL has had discussions with bankers and is confident that rates can be adjusted below the caps.
The decision to keep the key rates unchanged and impose caps on lending rates has been met with mixed reactions.
Some businesses and consumers have expressed disappointment, saying that they were hoping for a rate cut to help ease the burden of high inflation.
However, others have welcomed the decision, saying that it will help to stabilize the economy.
The CBSL will next review its monetary policy stance in October 2023.