COLOMBO: Sri Lanka's central bank on Monday kept policy rates steady at multi-year lows for a sixth straight month, as expected, and said it anticipates that previous cuts will bring lower lending rates to more sectors of the economy.
Between December 2012 and January 2014, the central bank cut the repurchase rate by 125 basis points (and the reverse repurchase rate by 175 bps to stimulate growth.
Despite the policy-easing measures, growth of credit extended to the private sector slowed to 2.2 percent year-on-year in May from 3.3 percent in April.
"The Monetary Board also noted the ongoing downward adjustments in market lending rates, which would result in the expected benefits of low cost of finance being fully transmitted to productive sectors of the economy," the central bank said in a statement.
The repurchase rate and reverse repurchase rate were left at 6.50 percent and 8.00 percent, respectively. A Reuters poll of 11 analysts had expected the central bank to keep the policy rates unchanged.
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