‘3rd Covid wave disrupting Sri Lanka’s economic recovery’

The Central Bank of Sri Lanka (CBSL) said on Thursday that the island nation’s economic recovery was being disrupted by an ongoing third wave of the Covid pandemic.

“The Sri Lankan economy, which rebounded notably during the second half of 2020 and early 2021 as per available indicators, is experiencing renewed disruptions due to the emergence of the third wave of the Covid-19 pandemic and related preventive measures, including isolations,” Xinhua news agency quoted the CBSL as saying in its monthly monetary policy review.

The CBSL statement said that impacts from the third wave are expected to be lower than during the first two waves due to selective restrictions and the country’s ongoing vaccination program.

Meanwhile, fiscal and monetary support for recovery will be maintained.

The CBSL said it would maintain its accommodative monetary policy amid this third wave of infections as inflation remains well anchored.

The Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) will therefore remain at 4.50 per cent and 5.50 per cent, respectively.

Accommodative monetary policy has been successful in increasing credit to the private sector during the first quarter of 2021, the CBSL said.

According to official figures, the total number of deaths recorded in Sri Lanka reached 1,051 since the pandemic broke out in the country in March 2020, while the total number of infections reached 151,343.