Sri Lanka’s Economic growth remains robust.

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Sri Lanka’s Economic growth remains robust.


Wednesday, 20 October 2010
Economic growth of the country remains robust and broad based with all sectors contributing to the expansion of output. The Central Bank claims Credit flows continue to rebound with credit to the private sector from commercial banks growing on a year on year basis by 12.8 per cent in August 2010, further reinforcing the growth prospects. At the same time, year on year growth in broad money remained moderate at 13.9 per cent in August.
The Bank further claims the successful issue of the 10-year international sovereign bond on 27 September at a comparatively lower coupon rate of 6.25 per cent and attracting an order book of more than 6 times the value of the bond reflects the improved investor confidence in the economy. Gross international reserves have increased with the receipt of the fifth tranche of the IMF-SBA facility and the proceeds of the international sovereign bond. Inflation, is expected to remain subdued over the coming months, although it showed an increase of 0.8% in the month of September over the inflation figure of August this year.Taking into consideration these current and expected developments in the economy, the Monetary Board, at its meeting held yesterday decided to maintain the policy interest rates of the Central Bank unchanged. Accordingly, the Repurchase rate and the Reverse Repurchase rate of the Central Bank would remain at 7.25 per cent and 9.00 per cent, respectively.(niz).