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Sri Lanka Can Hold Rates Until About September, Cabraal Says

Sri Lanka’s central bank is seeing improvements in the economy, Governor Ajith Nivard Cabraal said in an interview with Zeb Eckert on Bloomberg Television after keeping benchmark borrowing costs unchanged today.

On monetary policy:

“Keeping the rates on hold at this juncture seems appropriate strategy and we have done that. The conditions that we have now seem to support the position that we should be able to keep rates without making any changes up until about September. We would be most eager to ensure that the steady expansion of the economy could be supported on a continuous basis and that’s how we would like to see the next few months playing out.”

On economic growth:

“We have seen the improvements in the second and the third quarters already taking shape, which means that the growth forecast appears to be in line with our target and we would keep that number steady until such time that we have seen the final numbers of the first half and then we would decide whether any change is required. But as of now, 7.5 percent seems quite in line with the expectations that we have had.”

On China and Japan:

“The Chinese economy as well as Japanese economy are both very important economies for us because a large amount of investment comes in to Sri Lanka from China, and a large amount of inputs comes into Sri Lanka from Japan.

‘‘The impact on Sri Lanka as far as the Chinese growth is concerned may not be extremely vital for us right now. I think the current conditions that we see in both Japan and China seem to be not unfavorable to Sri Lanka and we would take the view that it should help us in the long term.’’

To contact the reporters on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net; Sharon Chen in Singapore at schen462@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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