Financial Times

Penal interest on reverse repo reduced


The Monetary Board has decided to reduce the penal rate of interest charged on reverse repurchase transactions with the Central Bank (CB) by 200 basis points to 17 %, the CB said in a press release.
The penal rate now serves as a ceiling on overnight interest rates and as a benchmark rate for other market rates.

The CB has decided to ease its monetary policy stance in view of the declining inflation and inflation expectations as well as the gradual decrease in market interest rates including yields on government securities. This reduction in the penal rate will lead to a further reduction in market rates of interest, it said.

“The significant decline in inflation over the past six months and the favourable outlook for inflation during 2009 has enabled the Central Bank to facilitate a reduction in market interest rates,” the release said.

The CB said it expects inflation to remain at modest levels thereafter, guided by its policies aimed at monetary stability. If the declining trend in price increases continues as expected, the CB said it will consider further easing its monetary policy stance, enabling financial intermediaries to reduce the rates at which they lend to borrowers further..

Top to the page  |  E-mail  |  views[1]
Other Financial Times Articles
> Probe against banks, officials continue
> Russian economy unfavourable till mid-2009, Lankan tea and tourism to feel impact
> 2,000 workers lose their jobs at Sinotex
> SriLankan posts US$ 1.7 million profit in December
> Golden Key auditor remanded
> Mobile games begin with Airtel in the ring
> Devaluation, IMF or crisis - Comment
> Importance of conducting a professional service as a business
> Airtel promotes network tower sharing
> New courses from SPAACS
> Bar Association - SAARC conference to promote South Asian business connectivity
> India’s Kingfisher flies to Colombo
> Qatar to provide language training to Lankans
> SC says its decision must be complied with by the President
> Golden Key staff in a tangle
> Stock news
> APB Lanka product wins silver at World Beer Championships
> ICASL seminar on ICT laws
> Round-table on Banking and Financial Issues
> Rs 400 mln national ‘rescue fund’ proposed for tourism sector
> Garment worker remuneration as good as other industries, says EFC
> Penal interest on reverse repo reduced
> Ceylinco Insurance surpasses Rs.20 bln revenue
> 14 pilots earn their Wings at SriLankan Airlines
> SUN Consultants launch operations
> Mobile phone numbers transferable from this year
> Indian fraud team to probe Satyam: Govt.
> Satyam scam: PwC top brass in India to assess situation
> World Bank bars deals with two more Indian firms
> Parties agree to set up trust to repay Golden Key depositors


Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2008 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution