Sri Lanka set to tighten monetary policy in 2011

The Central Bank of Sri Lanka (CBSL) kept its policy rates on hold at today’s meeting, as expected. Inflation has accelerated but is unlikely to reach a problem-pace any time soon. However, GDP growth will probably stay rapid too and overheating pressures should emerge over the next 12 months. Accordingly, we expect policy rates to move up from around the middle of next year.

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