The Central Bank of Sri Lanka has gone against IMF advice that it should avoid further monetary easing, and slashed its benchmark interest rate by 50 basis points to 7%.

Despite the IMF warning that interest rates "should be on hold" in the short term, the monetary board today cut rates in a bid to stimulate the country's static growth.

The board said it was "somewhat concerned by the slower than expected pick-up in economic activity" and identified a "growing need to enhance domestic demand and