Tuesday, January 10, 2012

Central Bank of Sri Lanka Continues to Hold at 7.00%

The Central Bank of Sri Lanka held its benchmark repurchase rate steady at 7.00%, and reverse repurchase rate at 8.50%, and Statutory Reserve Ratio at 8%.  The Bank said: "the significant structural changes that have taken place in the Sri Lankan economy over the last several years are expected to provide the momentum for the economy to grow by about 8 per cent in 2012, even in the midst of the slowdown in global economic activity. Continued development efforts aimed at improving economic and social infrastructure  are expected to augment the productive capacity of the country and thereby enable the realisation of the country's growth potential."

Sri Lanka's central bank also kept its monetary policy settings unchanged at its December meeting last year, while the Bank last cut its key interest rates in January last year.  Sri Lanka reported an annual headline inflation rate of 4.7% in November, down from 6.4% in September, 7% in August, 7.5% in July, 7.1% in June, and 8.2% in May.  

Sri Lanka had targeted 8.5% GDP growth in 2011, after its economy expanded 8% in 2010.  Sri Lanka reported 8.2% annual GDP growth in the second quarter (7.9% in Q1).  
The Sri Lankan Rupee (LKR) last traded around 114 against the US dollar.  The Central Bank of Sri Lanka next meets on the 9th of February 2012.


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