The Central Bank of Sri Lanka (CBSL) has decided to maintain the interest rates at their existing levels. Accordingly, the Repurchase rate and the Reverse Repurchase rate would remain at 7.25 per cent and 9.00 per cent, respectively.

The recent monetary easing by the Central Bank has helped improve domestic credit conditions, and thereby supported the sustained recovery in domestic economic activity. The external sector too has recorded encouraging performance in recent months, the Bank stated. It also said while domestic economic activity has rebounded strongly this year, it is expected that this growth momentum would continue into the next year too, supported by the recovery in the global economy.

Growth in broad money has remained within targeted levels, thus far, despite the pick-up in credit granted to the private sector in recent months, due to a decline in both net foreign assets of the banking system as well as credit obtained by the government from the banking system. While it is expected that credit flows to the economy would move in tandem with the level of economic activity, the Bank will take appropriate policy measures if it observes any signs of a build up of demand pressures in the economy, CBSL said.