Mar. 15 (LBO) – Sri Lanka’s balance of payments (BOP) has recorded a US$100 million surplus for the two-months to February, the Central Bank said Wednesday as it stayed pat on interest rates for the third straight month.
-Mel Gunasekera: firstname.lastname@example.org
The overnight repurchase rate remains at 8.75 percent and the reverse repurchase rate stays at 10.25 percent.
The repurchase rate is the return on cash deposited by commercial banks with the Central Bank and the reverse repurchase rate is the cost of borrowing from the Central Bank.
However, persistent excess liquidity in the system has increased the importance of the repurchase rate.
Investors were not surprised by the bank’s decision as authorities continue to maintain that inflation will ‘moderate’ this year.
“With inflation still on a downward trend, there is little immediate pressure to increase rates, a