Aug 01, Colombo: For the fifth consecutive month Sri Lanka's inflation decreased to 4.3 percent in July from a 4.8 percent in June 2010, figures released Friday (July 30) by the Central Bank's Statistics Department showed.

However, the annual average inflation increased marginally to 4.2 percent in July from 3.9 percent in the previous month. Consumer's Price Index almost remained same at 217.6 in July.

The Central Bank reduced policy interest rates earlier in July due to the low inflation in the country. The Bank expects low inflation rate for the remainder of the year.

The Bank reduced the reverse repurchase rate to 9.50 percent and the repurchase rate to 7.25 percent on July 9. The move was aimed at keeping inflation low and boosting economic recovery.

Citing economic growth and stability, the International Monetary Fund (IMF) last month approved a US$ 407.8 million disbursement to Sri Lanka as the third tranche of a US $ 2.6 billion Stand-By-Agreement approved in July 2009.

Overall economic conditions in Sri Lanka are improving and the economy is likely to show strong growth this year, the international lender said.