Sri Lanka central bank keeps rates steady. lenders asked to lower rates

Friday, 08 March 2013 - 14:19



Sri Lanka is holding its main policy rates a little below annual inflation of 9.8 percent, expecting prices to ease from March and has asked banks to cut lending rates to boost growth.

The Central Bank said in its March monetary policy statement that the repo rate at which excess money is drained from the system will be kept at 7.5 percent and the reverse repo rate at which money is injected will be kept at 9.5 percent.

Sri Lanka's Central Bank kept inflation at low single digits with a rupee peg acting as an external anchor but, lost control of the monetary system from mid 2011 by trying to sterilize foreign exchange sales with printed money and not allowing market rates to go up.