COLOMBO — Sri Lanka is expected to record a surplus in its current account for the first time in 32 years, the central bank said Monday.
The island's lower export earnings have been offset by a slower import bill that has helped Colombo post a 393 million dollar surplus for the nine months to September, the Central Bank of Sri Lanka said.
"It is expected that this performance will continue through the fourth quarter as well and the current account would record a surplus in 2009 for the first time since 1977," the bank said in a statement.
The Colombo-based bank on Monday also left its key lending rates unchanged at a five-year low to help the economy recover after a decades-long ethnic conflict with separatist Tamil Tiger rebels ended in May.
The benchmark reverse repurchase rate was held at 9.75 percent, while repurchase rate was held at 7.5 percent, the bank said following its monthly monetary policy meeting.
"Inflationary pressures continue to remain subdued," the bank said adding that it expects consumer prices to climb to five percent this year, and between five to six percent in 2010. Inflation in November stood at 2.8 percent.
"Prospects for domestic economic activity have improved with the more favourable investment climate that now prevails," the bank said.
The island's economy is forecast to expand by 3.5 percent this year and six percent in 2010, the bank said.
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