Sri Lankan Monetary Policy Decision

August 7, 2012

The Central Bank of Sri Lanka Monetary Board previously hiked its key repo and reverse repo rates by 50 basis points in February and another 25 bps in April.  Board members were satisfied at their mid-June meeting that the intended dampening effects on import growth and domestic credit expansion were happening.  At today’s meeting, officials concluded that the new policy stance remains appropriate, and they left the repo and reverse repo rate levels at 7.75% and 9.25%.  A statement on the central bank web site does, however, observe that CPI inflation accelerated from 9.3% in June to 9.8% in July, which is blamed partly on weather.  The statement continues to project economic growth this year of about 7.2% in Sri Lanka.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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