Inflation ( CCPI)0.9% (May 2024)
GDP5.3% (1Q 2024)
Unemployment4.3% (4Q 2023)
3M T-Bill Rate9.39%
12M T-Bill Rate9.90%
2Y T-Bond Rate10.10%/ 10.20%
4Y T-Bond Rate11.10% / 11.25%
USD/LKR304/305
Reserves $5.4Bn (May 2024)
Cum. Trade Deficit $1,229 Mn (March 2024 cumulative)
Cum. Fiscal DeficitLKR 2,320 Bn (Dec 2023)

CBSL moved to an easing cycle with 250 basis point reduction of its policy interest rate

Interest RatesJun 1, 2023
CBSL moved to an easing cycle with 250 basis point reduction of its policy interest rate

Market expectation was that it’ll take a much longer time for CBSL to move to a monetary easing. But CBSL announced a substantial interest rate reduction of 250 basis points today morning. Inflation had a sharp fall in May and experts believe it will follow a similar drop in June as well.

This early action taken by CBSL depicts the serious concern CBSL has on rising borrowing costs for the government, along with the positive impact an early move of an interest rate reduction prompt to transform the economy to positive a territory at least by 2024.

Disclaimer

Charts represents an assessment of the market environment as of the date indicated and it is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision. This document contains general information only and does not take into account an individual’s financial circumstances. An assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decisions.