Central Bank of Sri Lanka Eases Stance

January 2, 2014

Sri Lanka’s central bank surprised markets somewhat with a cut of its main lending rate to 8.0% from 8.5%.  The borrowing rate was not changed and will stay at 6.5%.  Both interest rates had been cut in December 2012 by 25 basis points, May 2013 by 50 bps and, most recently, in mid-October again by 50 bps apiece.  A statement from monetary officials expresses confidence that inflation will remain in the mid-single digits and observes that the rupee has traded more resiliently since September.  The economy is believed to have expanded just over 7% in 2013.

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

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