Sri Lanka market interest rates drop after rate cut

Tuesday, 14 May 2013 - 12:07


Sri Lanka's market interest rates has eased down with the effective policy rate settling at around 7.8 percent though the market auctions down from around 8.3 percent, before a 50 basis point rate cut last week.


On Friday markets were short and some banks borrowed from the 9.0 percent standing facility keeping rates elevated, after the Central Bank lowered its policy corridor by reducing the standing facilities by 50 basis points to 7.0 and 9.0 percent.


Rates started to adjust from Monday as markets liquidity increased and the Central Bank withdrew money though a repo open market auction at 7.83 percent, effectively setting a new policy signal rate within the standing facility corridor.