The Central Bank of Sri Lanka hosted the 45th SAARCFINANCE Governors’ Meeting and Symposium during 13-14 June 2024 in Colombo. The event was attended by the Governors, Finance Secretaries, and other delegates from the Central Banks and Ministries of Finance in the SAARC region.

The SAARCFINANCE Governors’ Symposium, themed “Central Banking amid Multi-faceted Global Economic Challenges,” was held on the first day of the event. Honourable Ranil Wickramasinghe, the President of Sri Lanka and Minister of Finance, Economic Stabilisation, and National Policies, graced the inaugural ceremony and delivered the keynote speech. In his address, the President emphasised the importance of strengthening regional cooperation to tackle contemporary economic challenges and promote growth. He also reiterated the need for monetary and fiscal stability and highlighted the efforts being taken to strengthen the legal framework to ensure lasting stability in the country. The Secretary General of SAARC, Ambassador Md. Golam Sarwar also attended the inauguration.

Currently, institutions providing money transfer services in Sri Lanka such as banks and non-bank financial institutions, are regulated by the Central Bank of Sri Lanka (CBSL) or other relevant authorities to ensure financial system stability. However, some entities providing similar services operate outside the formal system, potentially disrupting the money transfer system and not being subject to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regulatory framework.

Following the seasonal pattern where activities across many sectors slowdown during the traditional new year celebrations, Sri Lanka Purchasing Managers’ Index for Construction (PMI - Construction) decreased to an index value of 31.9 in April 2024. This indicates a contraction in construction activities compared to the previous month. As per the respondents, most construction sites were temporarily closed during the month due to the extended new year holidays, leading to this month-on-month decline.

The Monetary Policy Board of the Central Bank of Sri Lanka, at its meeting held on 27 May 2024, 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 8.50 per cent and 9.50 per cent, respectively. The Board arrived at this decision after carefully assessing the current and expected macroeconomic developments and possible risks on the domestic and global fronts with a view to maintaining inflation at the targeted level of 5 per cent over the medium term while supporting the economy to reach its potential. While the medium term inflation outlook remains compatible with the current level of policy interest rates and inflation expectations are well anchored, the Board observed the need for a further reduction in market lending interest rates in line with policy interest rates and other benchmark interest rates, which is imperative for the easing of domestic monetary conditions and domestic economic recovery.