inflation remains stable, despite VAT hike - CB

The Central Bank yesterday said it does not see the need to change the course of the current monetary policy path set off in June last year, as inflation remains well anchored, despite the near-term blips in the price indices, due to the recent hike in the Value Added Tax.

After cutting policy rates four times through November last year by a total of 650 basis points, the Central Bank Governor Dr. Nandalal Weerasinghe said the bank would hold off on any more rate cuts until both the Treasury yields and lending rates come down to levels closer to the policy rates, which currently stand at 9.0 and 10.0 percent, as it sees more room for them to fall by their own, in response to the previous rate cuts.