Sri Lanka Doubles Interest Rates Amid Protests

 

Sri Lanka doubled its interest rates on Thursday to tame runaway inflation amid protests by opposition MPs in parliament that are delaying key economic reform bills, the central bank said. The monetary authority’s Monetary Board voted unanimously to raise the key policy rate from 7% to 14%, Governor Indrajit Coomaraswamy told reporters in Colombo, without giving reasons. Sri Lanka raises interest rates The new benchmark rate will be effective from tomorrow, he said, adding that it would be reviewed again next month based on developments in the economy and financial markets

• Is the Central Bank on the right track?

Sri Lanka’s Central Bank has decided to double interest rates amid protests in an attempt to tame inflation, which is forecast to be around 5.4% for 2017 and 2018, according to statistics from Sri Lankan authorities. In a report by R.

• The 10 Things You Need To Know Before Investing In Sri Lankan Debt

If you’re thinking about investing in Sri Lankan debt, or are just curious about how inflation works and what it means for your investments, here are 10 things you need to know: 1. The Central Bank of Sri Lanka (CBSL) doubled interest rates last month as they try to tame high inflation, which has been driven by record fuel prices and continued capital flight. 2.

• How to save from rising interest rates

There are several things you can do to protect yourself from rising interest rates. You could take a look at your loan terms since that’s where interest rates typically change first. Make sure you’re paying enough of your balance each month so that you’re not just rolling over and adding to what you owe; don’t pay only minimum payments and end up paying more in interest than on principle.

• What you need to know about debt and interest

The basic definition of interest is an amount paid in addition to borrowed capital. Essentially, in Sri Lanka currency if you borrow $1,000 for one year at 10 percent annual interest, then your total payment at maturity will be $1,100 ($1,000 + $100), as opposed to just paying back $1,000. Generally speaking, with each dollar we borrow from someone else or some financial institution (i.e., a bank), we owe 1 cent plus an additional 10 cents in interest.

• Funding an emergency fund with a high-interest debt

If you don’t have an emergency fund, but you have a lot of high-interest debt (i.e., credit cards), look into using that debt to start building your emergency fund. This option works especially well if you can get your interest rate on one of your debts below 10% — or even better, at 0%. You might be able to consolidate loans with a balance transfer card for a lower rate as well.