By CentralBankNews.info
Sri Lanka’s central bank maintained its key policy rates, as expected, saying subdued international commodity prices, recent proposals to reduce value added tax and stable inflation expectations “would keep inflation at benign levels in the period ahead.”
The Central Bank of Sri Lanka, which has kept rates steady since October 2013, also said the reduction in market interest rates, including those on medium and long term credit facilities, was expected to reinforce a continued flow of credit to the economy.
Sri Lanka’s headline inflation rate fell to 1.6 percent in October, the lowest since November 2009, from 3.5 percent in September while core inflation eased to 3.6 percent from 3.7 percent, indicating “well contained demand pressures on inflation.
The central bank said last month that inflation was likely to remain lower than the previously forecast range of 4-5 percent in the period ahead. The central bank targets inflation of 4-6 percent this year and 3-5 percent in 2015 and 2016.
The central bank held its Standing Deposit Facility Rate (SDFR), which replaced the repo rate as a benchmark in January this year, steady at 6.50 percent along with the Standing Lending Facility Rate (SLFR) at 8.0 percent.
The central bank issued the following statement:
The date for the release of the next regular statement on monetary policy would be announced in due course.”