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Current monetary policy stance is appropriate-CB

Central Bank releasing the monetary policy review on Friday said it has decided to maintain current policy interest rates as the current monetary policy stance is appropriate.

Accordingly, the Monetary Board has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank unchanged at 7.25 percent and 8.75 percent, respectively while the Statutory Reserve Ratio remains at 7.50 percent.

Releasing the policy stance, the Central Bank said the Sri Lankan economy has grown by 3.8 percent (year-on-year) in the first quarter of 2017 although the Growth in the first quarter was weighed down by the impact of unfavorable weather conditions.

Following the increasing trend in the first quarter of 2017, both Colombo and National year-on-year headline inflation moderated during the months of April and May, as envisaged.

The Bank expects the inflation to moderate to mid-single digits by the end of 2017, and stabilize thereafter as the impact of the revisions to the tax structure and weather-related supply disruptions is expected to dissipate in the period ahead.

Monetary expansion remained at elevated levels by end April 2017, driven by the expansion in domestic credit channeled to both the public and private sectors from the banking system.

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