The first tranche of the International Monetary Fund (IMF) stand-by arrangement of US$322 million further boosted the gross external reserves of the Central Bank (CB) which had already exceeded US$2.3 billion on Monday.
The CB’s Monetary Policy Review released this week stated that the enhanced external sector stability over the recent months has enabled the CB to build up its foreign exchange reserves substantially while curtailing volatility in the exchange rate. Net foreign exchange purchases by the CB in the domestic foreign exchange market have continued to be positive since early July, supported by the steady inflow of remittances, export proceeds and non-resident investments.
The Review stated that by 17 August 2009, net foreign exchange purchases by the CB in the domestic market had exceeded US$600 million. The CB stated that market interest rates continue to decline in response to the monetary policy measures taken by the CB but are yet to fully adjust to the policy rate reductions by the CB.
The report further stated that inflation, which increased to 1.1% in July 2009 from 0.9% in June, is expected to rise moderately during the second half of the year but will remain at single digit levels. The Review also stated that the Monetary Board this week, decided to maintain policy interest rates of the CB at their existing levels. |
E-mail