The Central Bank raises its key short-term interest rates by 50 basis points with immediate effect.

After a 12-month lag, the Central Bank raised its key short-term interest rates by 50 basis points with immediate effect on Wednesday. After a 12-month lag, the Central Bank raised its key short-term interest rates by 50 basis points with immediate effect on Wednesday. The Repurchase (Repo) rate went up from 7.0% to 7.5% and the Reverse Repurchase (Reverse Repo) rate from 8.5% to 9.0 % effective from the close of business on November 10, 2004.

“The Monetary Board has reviewed recent economic developments and prospects and has decided to increase the Central Bank policy interest rates,” said the November monetary policy review, from the Central Bank of Sri Lanka (CBSL), on Wednesday.

In its review the bank puts overall growth for the year at around 5.0 – 5.5 per cent held down by drought and high international oil prices despite growth in industry and services.

Meanwhile the current account deficit expanded during the first nine months of the year due to a sharp rise in the trade deficit – that widened to US $ 1,571 mn compared to US$ 940 mn in the first nine months of 2003.

Inflows to the capital and financial a