Looking ahead, although some price pressures may be felt due to supply disruptions brought by drought conditions, inflation is expected to remain at mid single digits throughout the year supported by favourable inflation expectations, and subdued demand conditions.
In the external sector,inflows on account of workers’remittances recorded a significant increase in February 2014 while earnings from tourism also increased during the first quarter 2014. Gross official reserves are estimated to be around US dollars 8.0 billion as at end February 2014, which is equivalent to 5.3 months of imports. The reserve levels are expected to further improve with the proceeds of the US dollars 500 million sovereign bond issuance in April 2014.
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