COLOMBO, Oct 5 Reuters Sri Lanka39;s central bank resumed interest rate cuts on Thursday to boost growth and as the government seeks to lift revenue and repair its balance sheets in a bid to secure continued financial support from the International Monetary Fund.

The Central Bank of Sri Lanka CBSL lowered the standing deposit facility rate and the standing lending facility rate by 100 basis points each to 10 and 11, respectively, it said in a statement. The cuts followed a decision at the last policy meeting in August to keep rates unchanged.

The Board arrived at this decision following a careful analysis of the current and expected developments, the CBSL said in the statement.

The rate cut was in line with market expectations and comes amid cooling inflation in the South Asian nation.

Sri Lanka39;s economy was crushed last year under its worst financial crisis in over seven decades, with inflation skyrocketing and foreign exchange reserves falling to record lows, severely stunting the island nation39;s ability to import essential commodities.

CBSL responded by hiking rates a total 10.5 percentage points to contain inflation and rebuild reserves to shore up its currency. Since June, however, CBSL has now reduced rates by a total 550 bps as the economy stabilised following a 2.9 billion rescue package from the IMF in March.

Following the rate cuts, the prices of international bonds issued by the country rose, with June 2024 maturity bond leading the gains.

Sri…