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Central Bank maintains policy rates to stabilize inflation at mid-single digit levels

ITN News Editor
By ITN News Editor August 3, 2018 19:54

Central Bank maintains policy rates to stabilize inflation at mid-single digit levels

The Central Bank releasing its monetary policy review has said that based on the current developments and outlook for key macroeconomic variables, the Monetary Board was of the view that the continuation of the current monetary stance is appropriate. Accordingly, Central Bank Governor Dr. Indraajith Coomaraswamy said that the Standing Deposit Facility Rate and Standing Lending Facility Rate will remain at 7.25 percent and 8.50 percent, respectively, while the Statutory Reserve Ratio will remain at 7.50 percent.

Both national and Colombo inflation remained at low single digit levels, in spite of the transient acceleration mainly arising from the upward revisions to prices of domestic petroleum products and other administratively determined prices. The Central Bank Chief said that a gradual pickup in domestic economic growth is expected from the second quarter of 2018 and Inflation is expected to remain in mid-single digits in spite of the recent uptick.

The economy is projected to reach its potential over the medium term benefiting from a competitive flexible exchange rate, a low inflation environment and a stronger policy framework to support exports and investment, amidst continued fiscal consolidation.”

The Central Bank Chief added that although inflation is projected to remain at the higher end of the inflation target of 4 – 6 per cent in August as well, the onset of the harvest towards the end of the third quarter of 2018 is expected to lower inflation thereafter.

ITN News Editor
By ITN News Editor August 3, 2018 19:54