Central Bank Rate Cut in Sri Lanka

October 15, 2013

The third interest rate cut since December has been implemented by officials at the Central Bank of Sri Lanka.  The repo and reverse repo rates were each sliced by 50 basis points and now become 6.5% and 8.5%.  The reductions match ones made in May.  A set of 25-bp cuts were done in December 2012.  A statement released by authorities defended to move because of a “favorable” inflation prognosis, a smaller trade deficit, ample capital inflows, and money growth that doesn’t exceed expectations.

In keeping with the benign inflation and favourable inflation outlook environment, there is still further space to ease monetary policy in order to harness Sri Lanka’s full economic potential, and stimulate the economy to reach a higher growth trajectory in 2014.

Core CPI inflation is running at just 3.0%, and headline inflation is less than 6.5%.  GDP is expected to surpass 7.0% in 2013.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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