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The Central Bank of Sri Lanka slashed its benchmark standing deposit facility rate by 50bps to 5.5 percent during an emergency meeting in early May, to support the economy to weather the adverse economic impact caused by the COVID-19 pandemic, given subdued inflationary pressures. The standing lending facility rate was also lowered by 50bps to 6.5 percent.

The Central Bank of Sri Lanka slashed its standing deposit facility rate by 25bps to 6 percent at an emergency meeting on April 3rd, its second such reduction in three weeks, aiming to support the economy amid the coronavirus pandemic. "This decision will complement the measures taken thus far to ease market conditions, and enable the domestic financial market to provide further relief to businesses and individuals affected by the outbreak of the COVID-19 pandemic and restrictions placed to contain its spread within the country," the central bank said in its release. The standing lending facility rate was also cut by 25bps to 7 percent.

Sri Lanka's central bank slashed its benchmark interest rate by 25 bps to 6.25% at an emergency March meeting, in a bid to support economic activity following the rapid spread of the COVID-19 pandemic. The Central Bank also noted that is working closely with the government to ensure coordinated fiscal and monetary policy responses to mitigate the economic impact of the virus. The Standing Lending Facility Rate (SLFR) was also cut to 7.25%.

Sri Lanka's central bank held its key interest rate steady at 6.5% at its March meeting, saying the decision is consistent with the aim of keeping inflation between 4-6 % while supporting economic growth to reach its potential over the medium term. Policymakers highlighted the risks from the COVID-19 cases, adding that the exact impact on the economy would depend on the extent of its global spread, its persistence and policy responses of major economies and trading partners. The likely slowdown of the global economy and disruptions to the supply chain could affect Sri Lanka’s goods and service exports as well as related logistics, while the slowdown in global tourist movements will affect the country’s tourism, in addition to the direct impact of lower arrivals from China, the statement said. The spread of the virus to countries with a significant number of Sri Lankan migrant workers could affect remittance inflows. The Standing Lending Facility Rate (SLFR) was also kept to 7.5%.