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"Hence, in order to maintain inflation at a single digit level in the medium-term, it is imperative to continue with an appropriate tight monetary policy stance, while being accommodative to some extent during the ensuing periods to cushion the adverse impact of the financial crisis.
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Updated "The Sri Lankan economy is projected to grow at a lower rate in 2009 and then recover its growth momentum in 2010 with expected recovery in the global economy," the bank said in its annual report for 2008.
Central Bank governor Nivard Cabraal said new conditions such as the liberation of the north from Tamil Tiger separatist rebels will provide tremendous opportunities for the country.
"The end of the war will be looked at positively by foreign investors," he told a news conference where he presented the annual report.
"We are at a cross roads, notwithstanding global developments.
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Government forces have cornered the rebels on a small strip of coast in the north-east and say they are