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Wednesday, 04 April 2018 - 12:50
Central Bank implements rate cut

Central Bank says considering the favourable developments in inflation and inflation outlook as well as lower than expected real GDP growth that further widened the prevailing gap between actual and potential GDP growth, the Monetary Board has decided to reduce the Standing Lending Facility Rate, which is the upper bound of the policy interest rate corridor of the Central Bank, by 25 basis points.
This decision is also expected to dampen the volatility observed in interest rates in the domestic market during the recent past.
In the monetary sector, in spite of the increase in credit to the public sector by banks, the growth of both broad money supply and credit extended to the private sector remained subdued during the first two months of 2018.
Most market interest rates have stabilised at high levels, while real interest rates indicated an upward trend with declining inflation.
However, an undue increase in short-term market interest rates was observed recently, requiring the Central Bank to take corrective operational measures to address such volatility.
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