Central Bank's Monetary Board has decided to continue with the current policy rates in March to support the development activities of the country.

For the fourth month in a row, the reverse purchase rate will remain at 9.75 percent while the repurchase rate will remain at 7.50 percent.

"The performance in key sectors indicates a gradual recovery in the domestic economy. The performance in the industry and services sectors as well as the strong performance in the agriculture sector has raised the prospects for higher economic growth in 2010, while increased activity in the stock market reflects heightened investor confidence in the domestic economy. The financial system has also improved its soundness and profitability despite challenging global and domestic conditions," the Bank's Monetary Policy Review for March said.

However, the level of inflation according to the Central Bank has increased marginally to 6.9 percent in February from 6.5 percent in January, which has been attributed to the Bank's financing of the widening budget deficit.

The annual average inflation remained unchanged at 3.1 percent the Bank said, adding that the inflation is expected to remain subdued in the coming months due to improvements in supply conditions and several policy measures taken to ease price pressure.