2017.12.2800:09:00UTC+00Sri Lanka Central Bank Keeps Rates On Hold

Sri Lanka's central bank kept its key interest rates unchanged, on Thursday, as policymakers observed the current stance is appropriate.

The monetary board of the Central Bank of Sri Lanka maintained the standing deposit facility rate at 7.25 percent and the standing lending facility rate at 8.75 percent.

The economy had expanded at a slower than projected pace of 3.3 percent in the third quarter. The near-term growth prospects remain subdued but it is anticipated to recover in 2018 due to continuous surge in exports and investments.

Further, the central bank said inflation is expected to return to the desired level towards at the end of the first quarter of 2018, despite high food prices.

The growth in broad money supply slowed down substantially in November caused mainly by the deceleration in the growth of private sector credit as expected, responding to the tight monetary policy stance, the bank noted.

Some slippages in key fiscal balances in comparison to original estimates are expected in 2017 as a result of expenditures related to relief measures and high interest payments. However, the central bank expects fiscal consolidation to continue in the medium term supporting macroeconomic stability.