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CBSL on hold but rate cut still likely by end 2023

The central bank of Sri Lanka (CBSL) decided to keep monetary policy unchanged today, contrary to the expectations of most analysts (including ourselves), after having slashed rates by a cumulative 450bps at its past two meetings. In the near-term the central bank might rely on administrative and liquidity boosting measures, but we still expect interest rate cuts by year end due to weakness in the economy.

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