The Central Bank of Sri Lanka (CBSL) lowered the standing deposit facility rate and the standing lending facility rate to 9% and 10%, respectively, it said in a statement.

“The Board viewed that, with this reduction of policy interest rates and based on the available information, further monetary policy easing will be paused in the near term, given the space for market interest rates to adjust downwards in line with the current and past monetary policy easing measures,” the central bank said in a statement.

CBSL’s move aims to double down on growth as analysts have predicted the island nation will miss its projected target of 2% contraction for this year.

The CBSL has forecast Sri Lanka’s economy will shrink 2% this year after a 7.8% contraction in 2022 when it went into a tailspin because of a severe foreign exchange shortage. The World Bank, however, has predicted a 3.8% contraction in 2023.

The central bank increased rates by a total of 10.5 percentage points until March to contain inflation and rebuild reserves to shore up its currency, after the economy tanked last year in the country’s worst financial crisis in more than seven decades.

Since June, however, the CBSL has reduced rates by a total of 550 basis points, including a 100 basis point cut in October, as the economy stabilised following the IMF’s rescue package in March.