Sri Lanka holds rates steady, bets inflation will ease

Last Updated: Thu, Jan 17, 2013 02:20 hrs

COLOMBO, Jan 17 (Reuters) - Sri Lanka's central bank kept policy rates unchanged on Thursday, as expected after a surprise cut last month, saying it expected inflation to moderate soon.

"The Monetary Board was of the view that current monetary policy stance is appropriate," the central bank said in a statement.

"Effective demand management policies that were in place in 2012 are likely to have moderated aggregate demand sufficiently, reining in future inflation and inflation expectations. As a result, inflation is projected to moderate from March 2013 and reach mid-single digit levels thereafter."

The bank left the repurchase rate and the reverse repurchase rate at 7.50 percent and 9.50 percent, respectively. It also kept the commercial banks' Statutory Reserve Ratio (SRR) steady at 8 percent.

A Reuters poll with 14 analysts had expected that both rates would remain unchanged at their highest in three years. (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Kim Coghill)

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