Central Bank stays pat on key policy rate as economic indicators move in right direction

► OVERNIGHT POLICY RATE LEFT UNCHANGED AT 7.75% ► SAYS INTEREST RATE TRANSMISSION HAPPENED AS EXPECTED AFTER MAY POLICY RATE CUT ▸ ΜΟΝΕΤΑARY POLICY BOARD DOES NOT SEE ANY BUILD-UP OF UNDUE DEMAND PRESSURES IN ECONOMY ► INFLATION MOVES ACCORDING TO PROJECTIONS AND MIGHT SETTLE BELOW 5% MID-TERM TARGET BY YEAR-END

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The Central Bank left its key policy rate unchanged at its fourth monetary policy announcement yesterday, as Governor Dr. Nandalal Weerasinghe said all macroeconomic indicators are moving in the right direction, capturing the sentiments of the Monetary Policy Board, which decided the current policy stance is just about at the right level to accomplish their mandate in maintaining price stability.

The Central Bank left its Overnight Policy Rate at 7.75 percent, after it somewhat surprised the market with a 25-basis-point cut in May.

Dr. Weerasinghe said the previous policy rate cut achieved its desired goals, in both bringing down the lending rates in the economy while quickening the pace of consumer price growth, to help bring inflation to their 5.0 percent target.