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Monthly Economic Watch – July 2017

Monetary Policy Review

Policy rates unchanged

  • Private sector credit growth decelerated gradually to 20.4% in March 2017 and 20.0% in April 2017. The Earlier tightening of monetary policy by central bank and resultant increase in interest rates impacted the credit growth.
  • Despite improved export performance, a sustained increase in import expenditure resulted in a trade deficit of 3.3Bn till April 2017.
  • Gross official reserves improved to above USD 7.0 Bn by mid-June from 5.1Bn by end April 2017. Both the government securities market and the Colombo Stock Exchange experienced foreign inflows in recent months.
  • Accordingly policy rates were decided to be maintained at,
    • Standing Deposit Facility Rate – 7.25%
    • Standing Lending Facility Rate – 8.75%
    • Statutory Reserve Ratio (SRR) – 7.50%

Read the full report here: Monthly Economic Watch – July 2017

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka proving services to invest in Sri Lanka through fixed income securities such as investments in government securities– treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management,  retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.