New Inflation Measure Sidesteps Call For Monetary Action

BMI View: The Central Bank of Sri Lanka (CBSL)'s introduction of a measure for core inflation suggests the bank will continue refraining from hiking interest rates. However, while the core inflation data counters some of the perceived criticism from the International Monetary Fund (IMF) regarding Sri Lanka's headline inflation, commercial banks will continue to ignore the CBSL's benchmark repo rate, which stands at 10.5%, and keep basing their lending rates according to the market, which is offering over 18%.

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