The Monetary Board decided to cut both Standing Lending Facility Rate (SLFR) and Standing Deposit Facility Rate (SDFR) by an outsize 250 basis points at its meeting held on Wednesday.

The members of the board assessed that the policy support by way of lower interest rates is necessary to restart credit flows into the real economy, which has been in contraction since June last year.

Colombo inflation fell to 25.2 percent in May after easing to 35.3 percent through April from nearly twice as the levels seen just six months ago.

In fact the Central Bank expects inflation to return to single digit levels as early as July due to the substantially higher base effects of last year, which are still at play through at least August, and the prices to be maintained at the desired mid-single digit levels thereafter