Friday, 21 May 2021 11:17

Covid -19 hit Sri Lanka economy experiences renewed disruptions Featured

The Sri Lankan economy is experiencing, renewed disruptions due to the emergence of the third wave of the COVID-19 pandemic and related preventive measures, including isolation,” the central bank said in its May monetary policy review.

Although the country’s economy rebounded notably during the second half of 2020 and early 2021 as per available indicators, the present economic situation is not so rosy it said.

Sri Lanka is injecting overnight money into banks which are short at 5.50 percent and is also injecting permanent or longer term cash at a 5.18 percent ceiling rate set for Treasuries auctions, which is triggering a balance of payments troubles.

Covis-19 third wave has once recovery amidst the pandemic.

“It has also highlighted the need for continued fiscal and monetary support to place the recovery process on a firm footing.” again highlighted the disruptive nature of the pandemic and the challenges faced in sustaining the economic

The call came as net credit to government from the credit system rose 54 percent and net foreign assets component was a negative 1,629 percent in the year to March 2021.

Covid lockdown in most countries lead to falls in consumption, credit and reduced currency pressure.

The central bank said inflation was low and expectations were “well anchored inflation” and the Monetary Board was “committed to maintaining the current accommodative monetary policy stance to support the sustained revival of the economy”.

 

 

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