Central Bank of Sri Lanka Leaves Key Interest Rates Unchanged

December 14, 2009

Monetary policy easing paused in Sri Lanka as expected.  The key reverse repurchase rate was kept at 9.75%, having previously been lowered by 75 basis points in November, 50 basis points in September and a total of 225 bps from 12.0% since February.  The repo rate stays at 7.5%.  Such was reduced by 50 bps each in November and September and by 300 bps in all from 10.5% since last February.  A statement from the central bank spoke of subdued and benign inflation, but on-year CPI inflation doubled to 2.8% in November from 1.4% in October and had led analysts not to expect a further rate reduction this month.  The statement also observed a more favorable climate for business spending and anticipates improving credit conditions ahead.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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