|Sri Lanka cuts lending rates by 50bp
Sri Lanka's central bank cut a key lending rate by 50 basis points to 8 percent after inflation eased to its lowest level in nearly two years.
The move by the Monetary Board of the Central Bank of Sri Lanka represents the fourth consecutive reduction since December 2012. The deposit rate was kept at 6.5 percent. AFP reports.
The bank predicted the economy to have grown 7.2 percent in 2013, up from 6.4 percent in 2012 after announcing last week that inflation had hit a 22-month low of 4.7 percent.
“Economic growth is expected to accelerate further during the new year, while inflation is projected to remain in mid-single digits,'' the bank added in a statement.
It cut the two rates by 50 basis points in both October and May, while reducing them by 25 points in December 2012.
The bank forecast overseas trade will continue to rebound as developed nations see improvements in their economies, while it also said the country's trade deficit had narrowed to US$7.8 billion by the end of 2013.
The country's balance of payments also improved to record a surplus of US$700 million in calendar 2013 compared with a modest surplus of US$150 million the previous year, it added.
Remittances from Sri Lankans working abroad grew, helping the country amass foreign reserves of US$7.1 billion in December, up from US$6.8 percent in October.--AFP