"However, the increased utilisation of credit by public corporations, particularly the Ceylon Petroleum Corporation in the face of rising international oil prices, remains a concern," the Central Bank said.
The monetary authority has been keeping policy tight for over two months and selling down its holdings of Treasury bills on a net basis to sterilize money generated from exchange rate interventions.
Quantity Targets
The monetary policy statement made no mention of policy rates, which have not been raised for more than a year. However, interest rates are now largely market driven.
It no longer targets interest rates and allows rates to fluctuate between a band of 12 to 19 percent through two discount windows with restricted access. However overnight rates occasionally spike above the ceiling.
But the bank