Central Bank of Sri Lanka holds policy rates, says not look at IMF package

The Central Bank of Sri Lanka (CBSL) held key policy rates steady on Thursday, noting that disruptions caused by a third wave of Covid-19 infections during the second quarter had hindered the island nation’s economic recovery.

Following the rate decision, Governor W D Lakshman expressed confidence that Sri Lanka could avoid seeking a bailout from the International Monetary Fund, despite running down foreign exchange reserves to support a rupee that has lost over 7 per cent against the dollar since the start of the year.

“I would like to reiterate that I have confidence that there will be a gradual improvement in our external sector situation over time,” Lakshman told a virtual press conference.

He said there was no intention at the moment to go to the IMF for any support package, but the country could look to raise funds through the special drawing rights (SDRs) provision for member countries.