Sri Lanka Keeps Key Interest Rate Unchanged at 10.5%
Aug. 20 (Bloomberg) -- Sri Lanka's central bank kept its benchmark interest rate unchanged for an 18th straight meeting after inflation eased for the first time in seven months.
The Central Bank of Sri Lanka held its repurchase rate at 10.5 percent, the Colombo-based bank said in a statement today. All 11 analysts surveyed by Bloomberg predicted the decision.
Policy makers across Asia have been combating price pressures by raising interest rates. Sri Lanka's central bank has been relying instead on reducing money in circulation to tackle inflation, and last month lowered its 2008 target for reserve-money growth to 11.75 percent from 12.5 percent.
``Given its recent performance we believe the central bank will be able to achieve the new aggressive targets, implying slightly weaker growth and over time a reduction in price pressures,'' said Prakriti Sofat, an economist at HSBC Holdings Plc in Singapore.
Consumer prices in the capital Colombo rose 26.6 percent last month from a year earlier, after increasing 28.2 percent in June. Asia's second-highest inflation rate may decline as tight monetary policy damps consumer spending, central bank Governor Nivard Cabraal said Aug. 8.
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Published: Tue Aug 19 23:13:25 EDT 2008