"We are one of the few countries to start tightening early," Governor Cabraal said. "We will also see results earlier.
"
He said Indian inflation was still rising. India's wholesale price index rose to 12.
01 percent in the week to July 26, up from 11.
98 percent a week ago.
But Sri Lanka starts from a much higher base.
In July Sri Lanka's 12-month inflation measured by the widely watched Colombo Consumer Price Index fell to 26.6 percent from 28.2 percent in June.
Sri Lanka's central bank no longer runs a policy rate environment but operates a quantity targeting framework where the monetary base or reserve money is targeted while maintaining a peg with the US dollar in the form of an external anchor.
The monetary authority has not raised policy rates since February 2007, but in July it announced a further tightening of money targets.
The central bank said it would allow reserve money to grow by only 11.75 percent in the 2008 calendar year, down from a 12.
50 percent t