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Search resuls for: "Uditha Jayasinghe Swati Bhat"


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COLOMBO, Nov 24 (Reuters) - Sri Lanka's central bank on Thursday threatened administrative intervention to control high market interest rates that it regarded as out of line with the inflation outlook. Any such action, interpreted by economists as meaning it might push market rates down, would lower the government's high borrowing costs. However, it was unclear how the central bank could force investors to support public finances at lower rates than they expected. "If an appropriate downward adjustment in the market interest rates would not take place in line with the envisaged disinflation path, the central bank will be compelled to impose administrative measures to prevent any undue movements in market interest rates," CBSL said in a statement. "The statement was quite aggressive in saying they are prepared to use non-policy rate tools to nudge market rates, including deposit rates, lower," he added.
COLOMBO, Nov 24 (Reuters) - Sri Lanka's central bank held interest rates steady on Thursday, as widely expected, but said it expected a moderation in market interest rates in line with prevailing policy rates. The Standing Lending Facility (LKSLFR=ECI) rate was held steady at 15.50% while the Standing Deposit Facility Rate (LKSDFR=ECI) was kept unchanged at 14.50%. "If an appropriate downward adjustment in the market interest rates would not take place in line with the envisaged disinflation path, the central bank will be compelled to impose administrative measures to prevent any undue movements in market interest rates," it added. Thirteen out of 15 economists and analysts polled by Reuters had forecast the central bank's interest rates to remain unchanged as it waited to see effects of its earlier hikes to filter through to prices and the broader economy. Sri Lanka, which defaulted on its foreign debt repayments in May, secured a preliminary IMF deal for a $2.9 billion bailout in early September.
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