Policy interest rates to reduce

The Monetary Board, at its meeting held on September 11, 2009, has decided to reduce its policy interest rates by 50 basis points each, to be effective from the close of business on September 11, 2009.

Accordingly, the Repurchase rate and the Reverse Repurchase rate of the Central Bank would be 8 percent and 10.50 percent, respectively. Inflation, as measured by the year-on-year change in the Colombo Consumers' Price Index (base = 2002), has remained around one percent during the last three months.

While inflation is expected to gradually rise to moderate levels in the approaching months, it is projected to remain at single digit levels during the rest of 2009.