Sri Lankan Monetary Policy Not Changed

October 23, 2012

Officials at the Central Bank of Sri Lanka left their repo and reverse repo rates unchanged at 7.75% and 9.75%, respectively, after this month’s policy review.  A new statement called the current stance tight, appropriate, and effective in slowing private credit expansion and containing inflation.  On-year credit growth has slipped below 30% for the first time in 17 months, and CPI inflation of 9.1% last month had eased for a second consecutive time.  Overall Sri Lankan growth is adequate, but exports are slowing moderately in the face of weaker global growth.  Earlier this year, the central bank raised its key interest rates by 50 basis points in February and another 25 bps in April, but they have now been steady for a half year.

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

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