(Bloomberg) — Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Sri Lanka kept its benchmark interest rate unchanged for a second month as it tries to balance a slowing economy with rising inflation.In his final policy meeting before his departure, Governor Indrajit Coomaraswamy held the standing lending facility rate at 8%, the Central Bank of Sri Lanka said in a statement Friday. That was in line with forecasts of eight of the 10 economists surveyed by Bloomberg, with one predicting a rate cut of 25 basis points and another expecting a 50-basis-point cut.Key InsightsThe standing deposit facility rate was left unchanged at 7%, while the statutory reserve ratio was kept at 5%The policy meeting was the first since Gotabhaya Rajapaksa won the Nov. 16 presidential election on a platform to boost national security and resurrect the ailing economy. The interim cabinet approved a plan to cut the value-added tax rate to 8% from 15%, in addition to several other measures to kickstart demandIn its statement, the bank said political stability and fiscal stimulus can provide a short-term boost, while the economy — which grew 1.6% in the quarter ended June, its slowest pace in more than five years — should gradually revive over the medium termInflation, which accelerated to 5.4% in October, its fastest pace since August 2018, is set to remain within the desired 4%-6% range, the bank said in its statementCoomaraswamy, who took office in July 2016, will leave his post next month for personal reasons. After raising interest rates to a five-year high earlier in his term, he cut rates twice this year to revive growth after a series of bomb attacks in April weighed on the economyGet MoreRead the central bank’s decision statement here(Updates with details from decision statement in Key Insights section)To contact the reporter on this story: Anusha Ondaatjie in Colombo at [email protected] contact the editors responsible for this story: Nasreen Seria at [email protected], Michael S. ArnoldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
