The Central Bank of Sri Lanka Reduces the Bank Rate by 5%

COLOMBO (News 1st): The Central bank on Thursday said in-line with the policy rate cut it reduced the Bank Rate, the rate commercial banks borrow from Central bank in emergency funding, by 500 basis points from 15.00 percent to 10.00 percent with effect from 16 April 2020. The central bank in a statement said that the Monetary Board, at its meeting held on 15 April 2020 decided to allow the Bank Rate to automatically adjust in line with the Standing Lending Facility Rate (SLFR), with a margin of +300 basis points. “Accordingly, with effect from 16 April 2020, the Bank Rate, which is an administratively determined rate that could be used in periods of emergency, has been effectively reduced by 500 basis points from 15.00 per cent to 10.00 per cent,” the Central bank said. The Central bank said that the key policy interest rates of the Central Bank, the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR), has cumulatively reduced by 200 basis points each since 31 May 2019.