In Sri Lanka, South Asia, where economic turmoil is deepening, the central bank has decided to double the policy rate to respond to the sharp rise in prices.
Sri Lanka faced a shortage of foreign currencies and a depreciation of its own currency against the backdrop of a sharp drop in foreign tourists to less than one-tenth of its peak due to the Corona disaster, and as a result, the consumer price index in February was 17.5%. Is rising and inflation is sharp.
In addition, energy imports have stagnated and long-term rolling blackouts have continued, deepening economic turmoil.
Under these circumstances, the central bank of Sri Lanka announced on the 8th that it will raise the two policy interest rates by 7% each, doubling it to 13.5% and 14.5%.
The central bank said in a statement, "It is essential to take policy measures to stabilize the exchange rate," and aims to stop the decline in the domestic currency by raising interest rates and curb the rise in the prices of imported goods.
However, as Russia's invasion of Ukraine has increased inflationary pressure worldwide, there are concerns that the impact on the lives of its citizens will further increase.