Central Bank of Sri Lanka Eases Restrictions on Standing Facilities for Licensed Commercial Banks

February 08, 2024

Effective February 16, 2024, the Central Bank of Sri Lanka has announced the relaxation of restrictions imposed on Standing Facilities available to Licensed Commercial Banks under Open Market Operations. The move aims to provide greater flexibility to banks in managing their liquidity positions and supporting economic recovery efforts.

Notably, the restriction on the Standing Lending Facility will be entirely removed, allowing banks increased access to funds from the Central Bank when needed. This decision is expected to facilitate lending activities and stimulate credit flow to businesses and individuals, thereby bolstering economic growth.

Additionally, the restrictions on the Standing Deposit Facility will be relaxed, offering banks more options for parking excess funds with the Central Bank.

The decision to ease restrictions on Standing Facilities comes amidst ongoing efforts by the Central Bank to support the financial sector and promote stability in the wake of economic challenges.