Sri Lanka Has Space to Ease Policy Further, Weerasinghe Says

Sri Lanka’s central bank sees space to ease policy rates further if inflation remains below its forecast, governor Nandalal Weerasinghe said.

The central bank expects price gains to move toward the 5% target over the next four to six quarters, but if inflation remains below projection, “then obviously we see some space for us to relax,” Weerasinghe said at a ReutersNext event on Wednesday.

The comments come after the central bank unexpectedly cut its benchmark rate in May, renewing its policy easing cycle to bolster economic recovery amid global uncertainties. The next rate decision will be announced on July 23. ...