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

Accordingly, the Bank’s Repurchase rate remains at 7.00 per cent while its Reverse Repurchase rate remains at 8.50 per cent.

Sri Lanka’s economy expanded by 7.9 per cent in the first quarter of 2011, sustaining its high growth momentum in the previous year into 2011 as well. The expanded productive capacity of the economy will help enhance supplies of food as well as other commodities, thereby helping to bring down consumer prices, which results in headline inflation reducing from the April 2011 peak level, stated the Central Bank.

Sri Lanka’s exports have continued to perform well in 2011, and earnings from tourism as well as foreign exchange inflows on account of workers’ remittances are expected to increase further this year, it said. These increased foreign exchange earnings would help cushion the deficit in the current account. In the meantime, performance criteria for June 2011 as per the IMF-SBA have been successfully met, the Bank added.