On April 11th 2018, the Central Bank of Sri Lanka (“CBSL”), on behalf of the Democratic Socialist Republic of Sri Lanka (“Sri Lanka”), marked its return to the US dollar bond markets with a successful issuance of new US dollars 1.25 billion 5-year and US dollars 1.25 billion 10-year Senior Unsecured Fixed Rate Notes (the “Notes”) with maturity dates of April 18th 2023 and April 18th 2028 respectively. The Notes have been rated 'B1', 'B+' and 'B+' by Moody's Investors Service, Standard and Poor‟s and Fitch Ratings respectively.

This marks Sri Lanka‟s twelfth US dollar benchmark offering in the international bond markets since 2007. This also represents the largest offshore bond offering ever by Sri Lanka and is a strong reflection of the international investor community‟s continued support for Sri Lanka through the years. Citigroup, Deutsche Bank, HSBC, J.P. Morgan and Standard Chartered Bank acted as the Joint Lead Managers and Bookrunners on this successful transaction.

Considering the favourable developments in inflation and inflation outlook as well as lower than expected real GDP growth that further widened the prevailing gap between actual and potential GDP growth, the Monetary Board, at its meeting held on 03 April 2018, decided to reduce the Standing Lending Facility Rate (SLFR), which is the upper bound of the policy interest rate corridor of the Central Bank, by 25 basis points. This decision is also expected to dampen the volatility observed in interest rates in the domestic market during the recent past.

The Monetary Board’s decision to reduce the SLFR was based on the following macroeconomic developments: