Sun, 04 Dec 2022 Today's Paper

CB may keep rates steady as inflation, credit growth eases: poll

28 November 2016 12:02 am - 0     - {{hitsCtrl.values.hits}}

A A A

REUTERS: Sri Lanka’s Central Bank is expected to keep its key interest rates steady tomorrow, a Reuters poll showed, amid slowing inflation and credit growth after past tightening measures.
The Central Bank has already tightened its monetary policy stance three times since December, to fend off pressure on a fragile rupee currency and curb stubbornly high credit growth that has pushed up inflation. 


Nine out of 13 economists surveyed in the poll expect the Central Bank to keep both its standing deposit facility rate (SDFR) and standing lending facility rate (SLFR) unchanged at 7.00 percent and 8.50 percent, respectively. 


One economist expected a 50-basis-point hike in both policy rates while three expected a 25-bps hike. All 13 economists expect the statutory reserve ratio (SRR) to stay at 7.50 percent. 
“With inflation still fairly low, we think there’s a good chance that rates will be left on hold again this month,” said Capital Economics Ltd Assistant Economist Oliver Jones. 
“But inflation is set to pick up now that value-added tax (VAT) has been raised back to 15 percent and the election of Donald Trump in the US arguably increases the chances of fiscal loosening in the US, which might prompt the Fed to raise interest rates aggressively next year, putting the rupee under pressure.” 

He said it will not be too long before the Central Bank resumes its tightening cycle. 
But analysts said tight fiscal policies could mean the Central Bank has room to hold off from raising interest rates next year.
Meanwhile, the rupee has come under pressure because of lower interest rates, higher imports, and foreign outflows from government securities last year.  The currency is under pressure due to dollar demand from importers who fear the economic policies of US President-elect Donald Trump could lead to a rise in the greenback and interest rates.  Dealers said foreign investors might pull out of emerging markets, including Sri Lanka, if the US Federal Reserve raises interest rates next month. 
The International Monetary Fund (IMF) said on Saturday that Sri Lanka’s macroeconomic and financial conditions have begun to stabilise and the island nation’s performance under its US $ 1.5 billion loan programme is satisfactory. 
The Central Bank has raised both the SDFR and the SLFR by 50 bps each in February and July. That followed an increase of 150 bps in commercial banks’ SRR in December. 

 


Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

  Comments - 0

Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

She said/He said

Much has been written and said in the last few days since the news was releas

POLICE ON TRIAL: Exercising Authority without Accountability

Although armed with the power of the State and empowered to use force against

Downfall and death of LTTE’s Mahathaya

The Liberation Tigers of Tamil Eelam (LTTE) ceased to exist as a functioning

Rishi Sunak; why SL did not have a Tamil or Muslim as President?

Britain now has a British Asian, Hindu Prime Minister, though Rishi Sunak is