Sri Lankan central bank threatens regulatory action to bring down rates
The Central Bank of Sri Lanka is threatening banks with regulatory action if they fail to pass on rate cuts.
The CBSL’s monetary board cut its main deposit and lending rates by 50 basis points at an unscheduled meeting on May 6. The deposit rate now stands at 5.5% and the lending rate at 6.5%, both down 150bp since the start of the year. Required reserves are unchanged at 4%.
But the monetary board expressed its “disappointment” that market rates had not followed the central bank rates down.
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