Sri Lankan Monetary Policy Left on Hold

March 18, 2010

As expected, no changes were announced in the Central Bank of Sri Lanka’s 7.5% repo rate or its 9.75% reverse repo rate.  Those key interest rates were reduced by 300 basis points and 225 bps, respectively, during 2009 but not since November.  The next policy review is scheduled for April 22.  A statement released by the central bank observes a faster year-on-year rise in consumer prices of 6.9% in February but predicts subdued inflation ahead.  Price acceleration mainly reflects commodities and base effects.  Although the domestic economy has improved and the financial system is sounder, the main objective of monetary policy continues to be the promotion of growth.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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