Sri Lanka central bank holds rates as it awaits crucial IMF deal

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COLOMBO :Sri Lanka's central bank held interest rates steady for a third straight meeting on Wednesday, as widely expected, saying the prevailing tight monetary stance is crucial to taming still-high inflation and restoring economic stability.

The island nation of 22 million people, which is trying to clinch a $2.9 billion IMF funding package, is in the grip of its worst economic crisis since independence from Britain in 1948.

The Standing Lending Facility rate was held steady at 15.50 per cent while the Standing Deposit Facility Rate was kept unchanged at 14.50 per cent, remaining at their highest levels since August, 2001.

"The Board ... was of the view that the maintenance of the prevailing tight monetary policy stance is imperative to ensure that monetary conditions remain sufficiently tight to rein in inflationary pressures," the Central Bank of Sri Lanka (CBSL) said in a statement.