Dec 09, Colombo: Sri Lanka's Central Bank has decided to maintain current policy interest rates as its Monetary Board is of the view that the monetary policy decisions implemented throughout 2013 are timely and appropriate.
Accordingly, the Repurchase rate would remain at 6.50 percent while the Reverse Repurchase rate remains at 8.50 percent, the Central Bank announced Monday.
According to the Central Bank, the real GDP growth accelerated in the third quarter of 2013 while the inflation reduced significantly to levels lower than anticipated and the external sector showed further progress.
All key sectors of the economy contributed positively to the real GDP growth of 7.8 percent in the third quarter of 2013. The Agriculture sector grew by 7.0 percent, Industry Sector by 8.1 percent while the Services sector grew by 7.9 percent.
The Central Bank expects the sound, broad based growth performance in the third quarter will result in over 7 percent economic growth for the year.
The rupee continued to remain stable against the US dollar within the flexible exchange rate regime, as a result of improving external trade activity, increased workers' remittances and tourist earnings, increased inflows to the financial sector, and strengthened market expectations.
Key public corporations performed well financially prompting substantial repayments to the banking sector and facilitating an increased flow of financial resources for private investment, the Central Bank reported.
The International Monetary Fund (IMF) last week said it is encouraged by Sri Lanka's strong growth and moderating inflation, and by the economy's resilience despite the recent market turbulence but cautioned of the remaining vulnerabilities stemming from high debt and declining government revenues relative to GDP.
The IMF advised the Central Bank to allow time for the effects of monetary policy to feed through to private credit and money growth before easing further.