CBSL to take measures to mitigate economic impact of COVID-19

COLOMBO (News1st): The Central Bank of Sri Lanka is closely monitoring global and domestic market developments and will take further measures to mitigate the economic impact of the pandemic, Central Bank Governor Prof. W.D. Lakshman issuing a special statement said today. The bank said the action taken by the Monetary Board on Monday to reduce the interest rates will complement the measures that are already in place to revive economic activity, by inducing a further reduction in market lending rates and boosting liquidity conditions in the domestic money market. “We have requested all financial institutions led by licensed commercial banks to pass to the market the full benefit of the cumulative reduction of 75 basis points in policy interest rates thus far during the year as well as the reduced cost of funds through the reduction in SRR without any delay, to ensure that those who are in need of urgent support receive the required timely assistance,” Prof. Lakshman said. The Governor added that it is increasingly evident that domestic economic activity during the year 2020 would continue to be affected by the spread of the pandemic. Governor requested financial institutions to refrain from engaging in speculative activities which could lead to panic in the financial market saying that it is good for financial institutions to keep in mind that the revival of business activities in the country is to their own selfinterest. Governor also said that the monetary authority is working closely with the government to ensure coordinated fiscal and monetary policy responses to mitigate the economic impact of the pandemic. “As was done yesterday, the well tested business continuity arrangements of the Central Bank will be triggered as and when required to prevent any disruption to cash and electronic transactions of the general public and ensure the timely settlement of liabilities of the government and the Central Bank,” Governor said.