Sri Lanka raises policy rates by 100 bps as seeks to finalise IMF bailout

Sri Lanka's central bank raised interest rates in an unexpected move on Friday, to help finalise an International Monetary Fund's Extended Fund Facility (EFF) arrangement, it said in a statement.

The bank raised its standing deposit facility rate and standing lending facility rate by 100 basis points each to 15.50% and 16.50%, respectively. The country is awaiting approval of a $2.9 billion IMF bailout package.

Its economy has been squeezed by its worst financial crisis since independence from Britain in 1948, with growth contracting by an estimated 9.2% last year amid soaring inflation that hit 50% in February.