Central Bank Governor dispels fear of collapsing economy  

The Central Bank (CB) has taken precautionary measures to disseminate correct information on the  current economic situation and monetary sector policies, economic growth, interest rate, inflation and external sector performance being briefed to journalists at its monthly Monetary Policy Review media conferences.

Proceedings of all such future meetings will be recorded and posted in the CB web site enabling everyone to gain access to all matters discussed and disseminated at Monetary Policy Review conferences.

Announcing this decision at the outset of the Monetary Policy Review media conference in Colombo on Tuesday, CB Assistant Governor Asoka Handagama noted that journalists should confine their questions pertaining to matters within the ambit of the CB and its work. Briefing the media on factors behind the Monetary Board’s decision on Tuesday to maintain the policy interest rates at the previous level, CB Governor Dr. Indrajit Coomaraswamy said that economic growth, inflation, foreign reserves and the output gap were being maintained at favourable levels and  the Monetary Board has decided to maintain the policy interest rate unchanged.He said that the CB is in a position of managing the rupee depreciation and no one should panic about the stability of the economy.

Forward looking indicators suggest an improvement in the economic performance on the back of the modest recovery in the agriculture sector and continued positive momentum in the industry and services sectors.

Inflation is projected to remain within the 4-6 per cent target range over the medium term, he said adding that foreign reserves stood at US$7.3 billion. In the second quarter of the year, the economy expanded 3.7 per cent year-on-year, led by positive momentum from services and agriculture sectors, while industry remained moderate. During the remaining quarters of the year, the economy is expected to grow at a rate higher than in the first half of 2018 supported by exports and investment. The annual inflation rate fell to 4.3 per cent in September from 5.9 per cent. (Bandula)