Central Bank keeps rates at 7.75% as growth, inflation outlook firm

SAYS MAIN REASON FOR MAINTAINING RATES IS THAT PREVIOUS MONETARY POLICY ACTIONS ARE TRANSLATING INTO DESIRED OBJECTIVES IN MANY AREAS OF ECONOMY

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Dr. Nandalal Weerasinghe

(PIC BY PRADEEP PATHIRANA)

The Central Bank kept its benchmark overnight policy rate unchanged at 7.75 percent at its monetary policy meeting this week, stating the previous easing measures were taking effect and would guide inflation towards its medium-term target of 5 percent by the middle of next year.

Markets had been split ahead of the decision, with some expecting another 25-basis-point cut and others predicting a hold, citing signs of strengthening in the economy.

Governor Dr. Nandalal Weerasinghe said the Monetary Policy Board was convinced that the current level of interest rates was "just about at the right level" to achieve its inflation target.

"The main reason for the Monetary Policy Board to maintain the rates where they are is the fact that the previous monetary policy actions are translating into desired objectives in many areas of the economy," he said addressing the monetary policy briefing yesterday.