According to the Monitory Policy Review conducted by the Central Bank of Sri Lanka the inflation has kept on Decreasing from an year on year inflation rating scale.

Issuing a statement on this the Central Banka has stated at this rate the inflation rate has recorded it lowest grading in two years since the one recorded in February 2012.

Headline inflation (y-o-y) for June 2014 recorded 2.8 per cent from 3.2 per cent in the previous month, while core inflation remained low at 3.5 per cent in June, although marginally higher than 3.3 per cent in May 2014.

Heading on to this the price of some items in the food category increased but the declining position which the non-food materials  kept on moving has resulted in contributing towards inflation.

The report also states that when Looking ahead, year-on-year inflation is expected to remain comfortably within mid-single digit levels during the remainder of the year in spite of weather related variations in agricultural products.

When considering the external sector it states that this sector has been contracted for the eighth consecutive year and with the significant foreign investments rushing into the country through the increase in purchase of risky assets from the stock market.

In this regard the Colombo Stock Exchange has issued a statement saying that more and more foreign investments have started flowing into the country as the business sector started getting a healthy whiff regarding 'Risky Assets'.

In the above background, the Monetary Board decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank unchanged at their current levels of 6.50 per cent and 8.00 per cent, respectively.