Sri Lanka makes surprise 25 bps cut in policy rates

Last Updated: Wed, Dec 12, 2012 02:50 hrs

COLOMBO, Dec 12 (Reuters) - Sri Lanka's central bank on Wednesday cut its key monetary policy rates by 25 basis points to boost economic growth as inflation is expected to moderate next year, confounding market expectations that rates would be left unchanged.

The bank reduced the repurchase rate and the reverse repurchase rate to 7.50 percent and 9.50 percent respectively. A Reuters poll with 13 analysts had expected that both rates would remain unchanged.

The bank trimmed the rates, which had been at three-year highs, for the first time since January 2011. Rates had been kept steady since April as part of a strategy to counter a balance-of-payments deficit.

(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Simon Cameron-Moore)

More from Sify: