The Repurchase rate and the Reverse Repurchase rate unchanged at 7.75 per cent and 9.75 per cent, respectively.

In its Monetary Policy Review for this month (August) CBSL said that Policy measures implemented in February and March of this year, aimed at reducing the high import growth and the high credit expansion are yielding the expected results.

In the external sector, preliminary estimates indicate the desired deceleration of expenditure on imports in June 2012 and a corresponding decline in the deficit in the trade account in the second quarter of 2012, the Bank further said.

It also said the global economic conditions continue to worsen with the recovery of US and European economies remaining sluggish. However, these adverse global conditions are not likely to affect the Sri Lankan economy more than that was anticipated at the time of revising the economic growth forecast for 2012 downward to 7.2 per cent.