Friday, September 16, 2011

Central Bank of Sri Lanka Keeps Rate at 7.00%

The Central Bank of Sri Lanka kept its benchmark repurchase rate steady at 7.00%, and also held the reverse repurchase rate at 8.50%, and the Statutory Reserve Ratio at 8%.  The Bank said: "It is expected that the moderation of world economic activity along with the slowing down of both advanced economies as well as emerging economies would have some dampening effect on credit and therefore monetary expansion in the period ahead,".  Also noting: "if warranted, appropriate monetary policy action would be taken to contain monetary expansion, going forward."

Sri Lanka's central bank also held its monetary policy settings unchanged during its August meeting this year, while the Bank last cut its key interest rates in January this year.  Sri Lanka reported an annual headline inflation rate of 7% in August, down slightly from 7.5% in July, 7.1% in June, and 8.2% in May.  Sri Lanka is aiming for 8.5% GDP growth in 2011, after its economy expanded 8% in 2010, meanwhile inflation is expected to slow to 6% by the end of 2011.  Sri Lanka reported 8.2% annual GDP growth in the second quarter (7.9% in Q1).


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