Sri Lanka reduces interest rates for 1st time since bankruptcy as economy shows signs of rebounding

By KRISHAN FRANCIS
Associated Press

COLOMBO, Sri Lanka (AP) — Sri Lanka’s Central Bank has reduced its interest rates for the first time since the island nation declared bankruptcy last year. Stern fiscal controls, improved foreign currency income and help from an International Monetary Fund program has resulted in inflation slowing faster than expected. The Central Bank said in a statement that the lending and deposit interest rates have been reduced by 250 basis points to 14% and 13% respectively. The headline inflation stood at 35.3% in April and was reduced to 25.2% in May. It is expected to reach single-digit territory by the the third quarter.