Central Bank Governor expects to achieve economic growth next year while controlling inflation
Thu, Oct 14, 2021, 09:52 pm SL Time, ColomboPage News Desk, Sri Lanka.
Oct 14, Colombo: The Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal said today (14) that he expects to achieve high economic growth next year while controlling inflation.
Speaking at a media briefing held at the Central Bank Auditorium Thursday to release the Seventh Monetary Policy Review this year, Cabraal said Sri Lanka’s monetary policy has been flexible for a long time and in August, the Central Bank tightened the monetary policy stance.
“As the Monetary Board, we are of the view that there is no need to further reduce or increase interest rates. Therefore, we have decided to maintain the policy interest rate stance unchanged.”
“The Central Bank intends to use other tools in addition to policy interest rates. We hope that inflation will be largely controlled,” he added.
“We see the need for stronger growth for next year and we believe with the tourism opportunities that would arise as a result of the vaccination program that has been put in place by the government, we would see a strong rebound of tourism if the world also expect to near normalcy.”
“We hope to be able to take the country’s growth rate to a higher level in 2022. It also shows a global tendency to grow again. At the same time we have seen a situation where we cannot control prices.”
“We also saw an increase in the global prices of petroleum, gas, food, food crops and so on. We have observed that our country have to face the consequences. Our goal is to keep inflation at a single digit. It has become a bit difficult to reach that target due to the rapid increase in prices in the recent past. However, we hope to move towards that goal in the future.”
“We have seen that the credit growth continues even as interest rates remain unchanged. We are of the view that no further changes should be made in this regard. However, we will watch the situation in future and if there is a growth in debt while maintaining the interest rate, we will set targets internally and deal with it.”
“ We have also expressed our views on the exchange rate. Accordingly, we have decided to keep the exchange rate unchanged. Accordingly, we have decided to maintain the status quo in the country. That effort will continue. ”
The Central Bank of Sri Lanka has decided to maintain the Standard Deposit Facility Rate at 5%, the Standard Lending Facility Rate at 6%, the Banking Rate at 9% and the Statutory Reserve Rate at 4%.