COLOMBO, July 6 Reuters Sri Lanka cut its key interest rates for the second straight month on Thursday as inflation eased after last year39;s devastating economic crisis and the focus returned to reviving growth following a bailout from the International Monetary Fund IMF.

The Central Bank of Sri Lanka CBSL cut its standing deposit facility rate SDFR and standing lending facility rate SLFR to 11 and 12, respectively, from 13 and 14 previously, in line with analysts39; expectations. The 200 basis point bps cut followed a 250 bps reduction in June.

The island nation plunged into crisis last year as its foreign exchange reserves ran out and food and energy prices spiralled, with protesting mobs forcing the ouster of then president Gotabaya Rajapaksa.

The central bank raised rates by a record 950 bps last year to tame surging inflation and by 100 bps on March 3.

President Ranil Wickremesinghe took the reins in July and negotiated a 2.9 billion bailout from the IMF in March.

The banking and financial sector is urged to pass on the benefit of this significant easing of monetary policy to individuals and businesses, thereby supporting economic activity to rebound in the period ahead, CBSL said in a statement.

Governor P. Nandalal Weerasinghe said it would not hesitate in taking measures against financial institutions if the normal interest rate structure is not restored soon.

Sri Lanka39;s key inflation index peaked at 70 yearonyear in September and has come down…