The central bank of Sri Lanka has kept the lending rates unchanged at 15.5 percent following a monetary policy meeting on Thursday. Keeping the lending rates unchanged, the central bank of Sri Lanka said that the prevailing tight monetary policy stance is necessary to rein in any underlying demand pressures in the economy. The bank has so far hiked rates by a record 950 basis points this year to battle runaway inflation in the island.

Meanwhile the inflation rate has eased to 70.6 percent in October after hitting a record high of 73.7 percent in the previous month. The bank expects inflation to decelerate

further in the ensuing period.

An acute dollar shortage has left Sri Lanka struggling to pay for essential imports of food, fuel and medicine, and witnessed protests which forced the then President Gotabaya Rajapaksa to flee Sri Lanka.

With Colombo facing shortages of essentials, India extended aid worth about 4 billion US dollars to keep the country afloat. India has also supported  Sri Lanka’s bid for an International Monetary Fund bailout package and held discussions for restructuring of its debt in September this year.

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