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Wednesday, 22 January 2014 - 12:34
Sri Lanka policy rates to be steady
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Sri Lanka's policy rates will probably be kept at current levels for the next three to six months, a media report said as inflation remained subdued compared to earlier levels.

As Sri Lanka intervenes heavily in forex markets, bank rupee reserves can be generated and or withdrawn by purchases and sales in foreign exchange, making policy rates irrelevant to overall monetary policy.

Sri Lanka is recovering from a balance of payments crisis triggered in 2011 - 2012 largely by energy utilities that borrowed heavily from state banks to cover losses while importing fuel with he borrowed money.
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