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Sri Lanka policy rates unchanged

Mahilankadu farmers experience mechanised transplantation of paddy seedlings at the Commercial Bank programme

May 11, 2012 (LBO) - Sri Lanka's central bank its key policy rate unchanged at 9.
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75 percent saying monetary conditions are tightening and credit growth will moderate. The full statement is reproduced below

In April 2012, year-on-year inflation as measured by the CCPI (base=2006/2007) was 6.1 per cent while annual average inflation was 5.

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7 per cent. While inflation continues to remain at single-digit levels, the outlook for domestic food supplies remains favourable, which augurs well for domestic prices in the period ahead.
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The improvement in the supply of domestic agricultural produce over the last few years has continued to help stabilise domestic consumer prices. On the external front, international oil prices have recently declined and the Brent crude oil price was US dollars 112.

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41 a barrel on 10 May 2012 compared to US dollars 120 a barrel, on average, in March 2012. If this dampening of international commodity prices led by the decline in oil prices persists into the forthcoming period, pressure on the domestic foreign exchange market is likely to lessen markedly.
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The expected deceleration in the volumes of imports during the course of the

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