Sri Lanka Holds Key Rates as Rupee Falls, Growth Set to Pick Upby
All five analysts in Bloomberg survey predicted decision
Rupee has fallen to a record low, weakened about 9% this year
Sri Lanka’s central bank kept interest rates unchanged for a seventh straight month to support growth and help counter the rupee’s fall to a record low.
The Central Bank of Sri Lanka left its standing lending facility rate at 7.5 percent and standing deposit facility rate at 6 percent, it said in a statement on its website on Tuesday. All five economists in a Bloomberg survey had predicted no change.
Sri Lanka’s rupee has weakened about 9 percent this year, according to data compiled by Bloomberg, poised for its steepest decline since 2012 after the bank in September eased intervention in the currency. Central Bank Governor Arjuna Mahendran said on Monday that he saw no real reason to tighten monetary policy in Sri Lanka right now, particularly since weak global commodity prices will keep inflation in check.
Inflation will probably accelerate to between 2 percent and 3 percent by year’s end, the central bank said on Nov. 20. Consumer prices rose 1.7 percent in October after falling 0.3 percent in September.
The economy may grow about 5.7 percent this year, 6.5 percent in 2016 and move to a “higher growth trajectory” in the medium term, the central bank said. It grew 6.7 percent in April-June under a new calculation method.