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Monetary Policy Review - No. 8 of 2021

The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 24 November 2021, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 5.00 per cent and 6.00 per cent, respectively. The Board arrived at this decision after carefully considering the macroeconomic conditions and expected developments on the domestic and global fronts. The Board noted the recent acceleration of inflation, driven mainly by supply disruptions and the surge in global commodity prices, and reiterated its commitment to maintaining inflation at the targeted levels over the medium term with appropriate measures, while supporting the economy to reach its potential in the period ahead.

NCPI based Inflation increased in October 2021

Headline inflation, as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100), increased to 8.3 per cent in October 2021 from 6.2 per cent in September 2021. This was driven by monthly increases of prices of items in both Food and Non-food categories. Meanwhile, Food inflation (Y-o-Y) increased to 11.7 per cent in October 2021 from 10.0 per cent in September 2021, while Non-Food inflation (Y-o-Y) also increased to 5.4 per cent in October 2021 from 3.0 per cent in September 2021.

The NCPI, measured on an annual average basis, increased to 5.7 per cent in October 2021 from 5.5 per cent in September 2021.

Monetary Board Appoints Four New Assistant Governors

The Monetary Board, at its meeting held on 17th November 2021 has promoted Mr. K G P Sirikumara, Mr. D Kumaratunge, Mrs. U L Muthugala, and Mr. C P S Bandara to the post of Assistant Governor with effect from 17th November 2021.

Sri Lanka Purchasing Managers’ Index - October 2021

Purchasing Managers' Indices for both Manufacturing and Services activities expanded in October 2021.

Indicating a strong revival in manufacturing activities in the country, the manufacturing PMI reached a 7-month high at 60.4 in October 2021.

Services PMI increased to 57.9 in October 2021 underpinned by the increases in New Businesses, Business Activities and Expectations for Activity sub-indices.