Central Bank of Sri Lanka

November 18, 2014

The central bank lending rate (reverse repo) and borrowing rate (repo) have been at 8.0% and 6.5% since the former was cut from 8.5% last January.  Between December 2012 and October 2013, each of those rates also were lowered in three steps by a cumulative 125 basis points.  Falling inflation justified these reductions.  On-year CPI inflation last month of 1.6% was at a 66-month low.  After this month’s policy meeting, monetary officials again left both interest rates as well as the 6% reserve requirement unchanged, and they released a statement that called the existing policy “appropriate.”  Officials anticipate and welcome a robust growth in bank credit to the private sector in the period ahead.  The statement reveals no inclination to adjust interest rates for the time being.

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



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