Sri Lanka Central Bank Unexpectedly Raises Key Policy Rates

Central banks in Asia are raising interest rates to combat inflation, defend currencies, and attract foreign investors. Sri Lanka faces unique challenges due to inflation and drought, prompting policy tightening. The overall trend in Asia is towards higher interest rates and tighter financial conditions.

What is one of the main challenges faced by central banks in Asia?

• Increasing foreign trade

• Decreasing interest rates

• Reducing unemployment rates

• Managing inflation while ensuring economic growth

What specific issue has Sri Lanka been dealing with that affects its inflation?

• Political instability

• Drought conditions

• High unemployment

• Trade deficits

Why are some central banks in Asia raising interest rates?

• To increase exports

• To control inflation and defend currency

• To reduce government debt

• To lower unemployment

What is one reason central banks might align their interest rates with global trends?

• To decrease inflation

• To increase domestic spending

• To reduce trade barriers

• To attract foreign investors

What is the overall economic trend in Asia regarding interest rates?

• Interest rates are decreasing

• Interest rates are stable

• Interest rates are increasing

• Interest rates are unpredictable