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Tuesday, January 11, 2011 - 05.42 GMT |
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CB reduces rates |
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The Central Bank of Sri Lanka (CBSL) has decided to reduce the Repurchase rate by 25 basis points and the Reverse Repurchase rate by 50 basis points to 7.00 per cent and 8.50 per cent, respectively, with effect from 11 January 2011.
In its Monetary Policy Review for this month (January) CBSL said that in the coming months, domestic agricultural production is expected to increase along with the increase in the extent of land cultivated. In addition, the enhanced capacity utilization in many sectors of the economy, with the development of infrastructure, reasonable productivity gains and greater efficiency of capital employed, would help ease domestic price pressures.
It also said the government remains committed to securing a budget deficit of 6.8 per cent of GDP in 2011 with current indications showing that such deficit target is very likely to be achieved.
Annual average inflation in 2010 was 5.9 per cent. Accordingly, inflation has continued to hover around mid-single digit levels, although weather related factors and supply disruptions have led to increases in prices of some selected food items time to time, states the CBSL.
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