Sri Lanka's central bank unexpectedly reduced its benchmark rates on Tuesday to support the economic recovery. The Monetary Policy Board of the Central Bank of Sri Lanka, led by Governor Nandalal Weerasinghe, decided to cut the Standing Deposit Facility Rate by 50 basis points to 8.
The Central Bank of Sri Lanka kept its benchmark interest rates unchanged on Tuesday as inflation is likely to move upward due to the increase in value added tax.
The Central Bank of Sri Lanka lowered its benchmark rates by 100 basis points on Thursday citing faster deceleration of inflation. The Standing Deposit Facility Rate and the Standing Lending Facility Rate were reduced by 100 basis points to 10.
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28 January 2021
Author: Bilesha Weeraratne, Institute of Policy Studies of Sri Lanka
International migrants have historically been a driving force of the Sri Lankan economy and during the COVID-19 pandemic their remittances have helped boost the country’s foreign exchange earnings.
In 2019 over 200,000 Sri Lankans left for foreign employment. 85 per cent headed to the Middle East. The pandemic caused worker migration to decrease by 56 per cent in the first half of 2020 compared to 2019. By October 2020 over 54,000 Sri Lankans were repatriated, including nearly 18,000 migrant workers from the Middle East. Another 43,000 are waiting to be repatriated. Such high returns are due to job losses, wage cuts and other negative employment outcomes surrounding the pandemic.