Sri Lanka Cuts Rates, First Time in 3 Years

Image copyright: Wikimedia Commons

The Facts

  • On Thursday, Sri Lanka's central bank cut interest rates for the first time in three years, less than three months after the state agreed to a $2.9B bailout from the International Monetary Fund (IMF).

  • The Central Bank of Sri Lanka (CBSL) reduced its deposit facility rate as well as its standing lending facility rate from 15.5% and 16.5% to 13% and 14%, respectively, stating the decision would "help steer the economy towards a rebound phase."

The Spin

Narrative A

Sri Lanka's turn of fortune is thanks to the correct policies and practices implemented by the government. While some groups continue to attempt to hinder Sri Lanka's continued progress, new reforms will continue to generate opportunities for all to grow and thrive as sustainable development and prosperity are sought.

Narrative B

Sri Lanka is too important strategically for the West to let slip, and despite recent progress, many may endure hardship once the country's debt restructuring truly begins to take shape alongside a gloomy economic outlook for many countries heading into 2024. Outside of the IMF's help, Sri Lanka holds no long-term plans to continue the current momentum of growth.

Sign up to our daily newsletter