The Sri Lankan economy is poised for stronger performance with the recovery observed in the external sector, sustained momentum in construction and manufacturing sectors and with monetary aggregates performing as expected, and inflation remaining low and stable, stated the Central Bank in its Monetary Policy Review – April 2014.
In the external sector, inflows on account of workers’ remittances recorded a significant increase in February 2014 while earnings from tourism also increased during the first quarter 2014. Gross official reserves are estimated to be around US dollars 8.0 billion as at end February 2014, which is equivalent to 5.3 months of imports. The reserve levels are expected to further improve with the proceeds of the US dollars 500 million sovereign bond issuance in April 2014, the Bank said.
The Central Bank also decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank unchanged at their current levels of 6.50 per cent and 8.00 per cent, respectively.
Inflation remained low for March 2014 recording 4.2 per cent, unchanged from the previous month, while core inflation increased marginally to 3.4 per cent in March from 3.1 per cent in February 2014, the Bank added.