Central Bank of Sri Lanka
November 7, 2017
The Monetary Policy Committee kept its deposit rate unchanged at 7.25% and its lending facility rate at 8.75%. The late increases in these rate were a pair of 50-basis point moves in February and July of 2016, and the levels are now the highest in a bit over four years. The post-meeting statement revises projected 2017 GDP growth in Sri Lanka slightly lower to somewhere between 4.0% and 4.5%. It was previously forecast to be 4.5%. It is somewhat controversial that policy was not tightened, for inflation in October accelerated 0.7 percentage points to 7.8% and private domestic credit growth, though lower than peak, remains quite elevated. However, countering a growth rate that is deemed too low and struggling under the burden of both drought and then flooding earlier this year, officials are now giving the task of supporting growth greater priority.
Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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