Sri Lanka hikes key policy rate by 100 bps to support its currency

Central Bank of Sri Lanka on Tuesday raised key policy rate by 100 basis points, citing higher inflation and a depreciating rupee due to Iran war. It raised the overnight policy rate to 8.75% from 7.75%. The central bank last tightened monetary policy in March 2023. Notably, the Sri Lankan rupee is among the worst performers in Asia this year.