Sri Lanka's central bank holds rates unchanged to support economic recovery

The Sri Lankan central bank held interest rates steady to support a nascent economic recovery after having raised rates in August

The Sri Lankan central bank held interest rates steady on Thursday as it sought to support a nascent economic recovery after having raised rates in August to curb inflation pressures.

The Central Bank of Sri Lanka (CBSL) left the standing deposit facility rate and the standing lending facility rate unchanged at 5.00% and 6.00%, respectively.

"The Board noted the recent acceleration of inflation, driven mainly by supply disruptions and the surge in global commodity prices, and reiterated its commitment to maintaining inflation at the targeted levels over the medium term with appropriate measures, while supporting the economy to reach its potential in the period ahead," the CBSL said in a statement.

Five out of 12 economists polled by Reuters expected rates to stay unchanged, while the remaining seven expected the CBSL to increase them by between 25 and 50 basis points.

The CBSL has held rates steady for two consecutive meetings, after raising them by 50 basis points each in August.

(Reporting by Swati Bhat; Editing by Ana Nicolaci da Costa)