Central Bank of Sri Lanka

March 21, 2014

For a second meeting since a 50-basis point cut of the Sri Lankan reverse repo rate to 8.0% — a move that was opposed by the IMF — officials elected not to change either that interest rate or the borrowing repo rate of 6.5%.  Both rates had been cut by 25 basis points in December 2012 and by 50 basis points apiece in May and December of 2013.

Today’s statement, like the one in February, called the current monetary policy stance appropriate.  Total and core CPI inflation slowed in February to 4.2% and 3.1%, respectively, and officials project total inflation remaining around the mid-single digits for the rest of this year.  Real GDP has strengthened from a growth pace of 6.3% in 2012 to 7.3% in full-2013 and 8.2% in the final quarter of last year.  The balance of payments has improved, and domestic credit expansion should quicken.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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