Sri Lanka Cuts Interest Rate to 8% After Debt Restructure Deal
The Central Bank of Sri Lanka said it was moving to a single policy rate set at 8.0 percent, an “effective reduction” of around 50 basis points.
The move came a day after the government vowed to honor a deal secured by its predecessor to restructure $12.55 billion in international sovereign bonds, a key condition of an International Monetary Fund bailout.
The Fund welcomed Sri Lanka completing its external debt restructure and urged international bondholders and other creditors to accept the terms offered by Colombo.
Sri Lanka secured a $2.9-billion bailout from the IMF in 2023 after doubling taxes, withdrawing energy subsidies, and raising prices of essentials to shore up state revenue.
A majority of private creditors of the South Asian nation agreed two months ago to a 27 percent haircut on their loans, but it needed the approval of the new administration.
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