Sri Lanka reserve ratio cut to inject Rs60bn in cash; no forex pressure expected: CB Governor

ECONOMYNEXT – A cut in the share of deposit that commercial banks must place with the Central Bank (statutory reserve ratio) from 6 percent to 5 percent will release 60 billion rupees into the banking system, Central Bank Governor Indrajit Coomaraswamy said.

 Sri Lanka now has a liquidity shortage of over 100 billion rupees in the interbank market.

 Governor Coomaraswamy said he does not expect any pressure on the rupee as liquidity will still be short.

 "There will still be a liquidity shortage of 40 billion rupees", he said.

 Sri Lanka’s rupee has stabilised and external conditions were also better than last year, he said.

 Capital inflows were coming back to emerging markets, he said. (Colombo/Feb22/2019-SB)

 

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