Sri Lanka central bank holds rates, says tight conditions key to taming runaway inflation

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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.

With Sri Lanka's economy in the throes of the worst financial crisis since independence from Britain in 1948, the government is waiting for financing assurances from China, its largest bilateral lender, that would help clinch a $2.9 billion IMF package.

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.