“We want to see the market response,” Cabraal said in an interview with Bloomberg yesterday. “We will look at new policy intervention, if necessary, at the right time.”

The Central Bank of Sri Lanka cut the reverse repurchase and repurchase rates by a quarter-point to 9.5 percent and 7.25 percent, taking advantage of low inflation to boost economic growth.

Meanwhile, speaking at a training programme on macroeconomic and monetary policy management for regional central bankers held in Colombo, the Governor said sometimes policy interventions by central banks to restore economies back to health could have side effects that are interpreted differently by those outside the bank who then demand change.

"We found that when you raise interest rates people think it's going to kill growth and you'll never come out of the situation. So the pressure to bring it down faster than you should, sometimes can be very serious and very compelling," he said.