The Central Bank of Sri Lanka (CBSL) has decided to maintain the Overnight Policy Rate (OPR) at the current level of 7.75%.

The Monetary Policy Board arrived at this decision at a meeting held yesterday (24) after carefully considering evolving developments and outlook on the domestic and global fronts, with particular attention to uncertainties arising from the ongoing Middle East conflict.

According to the CBSL, the sharp increase in global energy prices and trade disruptions amidst heightened uncertainty due to the escalation of geopolitical tensions necessitated a significant upward adjustment in domestic energy prices. 

The current low level of inflation, at 1.6% (y-o-y) in February 2026, relative to the target of 5%, provides sufficient space to accommodate the impact of higher energy prices and their spillovers on inflation. Given the latest available data and prevailing uncertainties, inflation is now expected to reach the target of 5% in Q2-2026, earlier than previously anticipated. Inflation is projected to remain around the target thereafter.

The economy recorded a strong real growth of 5.0% in 2025, despite the disruptions caused by Cyclone Ditwah towards the end of the year. Leading economic indicators point to a strong post-Cyclone recovery during early 2026.

However, spillovers from the ongoing conflict could weigh on domestic economic activity in the period ahead, should the conflict be prolonged. 

The CBSL further states that the external sector remained robust in the first two months of 2026, supported by stronger export earnings compared to imports, along with higher remittances and tourism earnings. 

Gross Official Reserves increased to USD 7.3 bn at the end of February 2026, and the Central Bank purchased a substantial amount of foreign exchange from the market in the first two months of the year. 

However, the ongoing conflict in the Middle East poses risks to Sri Lanka’s external sector outlook, particularly through energy, tourism, trade, and remittance flows, although the overall magnitude of the impact remains uncertain. 

While the Sri Lankan rupee remained relatively stable in early 2026, some depreciation pressures were observed following the onset of the Middle East conflict, similar to the exchange rates of regional peers. 

The CBSL added that the Board remains prepared to implement appropriate policy measures to ensure that inflation stabilises around the target, while supporting the economy to reach its potential. 

The release of the next regular statement on the monetary policy review will be on 26 May 2026. (Newswire)

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The Monetary Policy Board of the Central Bank of Sri Lanka has decided to maintain the Overnight Policy Rate (OPR) at the current level of 7.75%.

The Board arrived at this decision at its meeting held yesterday, after carefully considering both domestic and global developments. 

It is of the view that the current monetary policy stance will support steering inflation towards the target of 5%. 

The CBSL further states that headline inflation based on the Colombo Consumer Price Index (CCPI) turned positive in August 2025, ending eleven months of deflation. Inflation is projected to gradually increase towards the target of 5% by mid-2026. Reflecting strengthening domestic demand, core inflation is also expected to pick up and stabilise thereafter around the headline inflation target. Medium-term inflation expectations remain anchored around the inflation target. 

The economy is estimated to have grown by 4.8% in H1-2025. Leading indicators reflect a continuation of this momentum into Q3-2025. Credit to the private sector recorded a notable and broad-based expansion thus far in 2025. This expansion has been supported by the low-interest-rate environment and the recovery in economic activity. The continued expansion in private sector credit is expected to further support domestic economic activity in the period ahead. 

The external sector remained resilient, supported by improved inflows from tourism and workers’ remittances, despite a widening trade deficit. Continued net foreign exchange purchases by the Central Bank have helped maintain gross official reserves at US dollars 6.2 billion by the end of August, amidst debt service payments. The Sri Lankan rupee remains broadly stable. All three major rating agencies have now raised Sri Lanka’s sovereign ratings, confirming the improved credit standing. Meanwhile, global financial conditions have eased, although geopolitical uncertainties remain. 

The Board will continue to monitor and assess incoming data on developments on the domestic and global fronts and emerging risks. The Board remains prepared to implement appropriate policy measures to ensure that inflation stabilises around the target, while supporting the economy to reach its potential. 

The release of the next regular statement on the monetary policy review will be on 26 November 2025. (Newswire)

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The Central Bank of Sri Lanka (CBSL) has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) at their current levels of 8.50 per cent and 9.50 per cent, respectively. 

The decision was taken at the meeting of the Monetary Policy Board of the Central Bank of Sri Lanka held on Monday (May 27).

A CBSL statement says the Board arrived at this decision after carefully assessing the current and expected macroeconomic developments and possible risks on the domestic and global fronts with a view to maintaining inflation at the targeted level of 5 per cent over the medium term while supporting the economy to reach its potential. 

While the medium-term inflation outlook remains compatible with the current level of policy interest rates and inflation expectations are well anchored, the Board observed the need for a further reduction in market lending interest rates in line with policy interest rates and other benchmark interest rates, which is imperative for the easing of domestic monetary conditions and domestic economic recovery.

Full report : https://shorturl.at/SU8Y9 (Newswire)

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The Central Bank of Sri Lanka has decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 50 basis points (bps) to 8.50 per cent and 9.50 per cent, respectively. 

The Monetary Policy Board of the Central Bank arrived at the decision at its meeting held on Monday (Mar 25) following a comprehensive assessment of current and expected domestic and international economic developments, to maintain inflation at the targeted level of 5 per cent over the medium term, while enabling the economy to reach its potential. 

In arriving at this decision, the Board took note of, among others, subdued aggregate demand conditions, the lesser-than-expected impact of the recent changes to the tax structure on inflation, favourable near-term inflation dynamics due to the recent adjustment to electricity tariffs, well-anchored inflation expectations, the absence of excessive external sector pressures and the need to continue the downward trajectory in market interest rates. 

The Board observed that the possible upside risks to inflation in the near term would not materially change the medium-term inflation outlook, as economic activity is projected to remain below par for an extended period. 

The Monetary Policy Board underscored the need for a swift and full passthrough of monetary easing measures to market interest rates, particularly lending rates, by the financial institutions, thereby accelerating the normalisation of market interest rates in the period ahead. 

The full report : https://shorturl.at/ikuxY (NewsWire)

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The Central Bank of Sri Lanka (CBSL) has issued a clarification on its Monetary Policy Board Meeting scheduled for today (Feb 07).

Issuing a statement, the Central Bank acknowledged that a special Monetary Policy Board Meeting will take place as scheduled. 

The Central Bank said, however, that this meeting will not lead to a policy interest rate decision. (NewsWire)

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The Central Bank of Sri Lanka has decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 100 basis points (bps) to 10.00 per cent and 11.00 per cent, respectively. 

Issuing a statement, the bank said the decision was taken during the first monetary policy review by the Monetary Policy Board under the Central Bank of Sri Lanka Act, No. 16 of 2023 (CBA) held on Wednesday (Oct 04). 

The Monetary Board decided to reduce policy interest rates following a careful analysis of the current and expected developments, including low inflation and benign inflation expectations in the domestic economy, with the aim of stabilising inflation at the envisaged 5 per cent level in the medium-term, thereby enabling the economy to reach its potential growth. 

The Board expects that this reduction of policy interest rates, along with the significant easing of monetary policy effected previously, including the directions issued by the Central Bank to licensed banks to reduce interest rates, and the significant reduction of risk premia on government securities, would accelerate the downward adjustment in market interest rates, particularly lending rates, in the period ahead. 

The CBSL statement further said that the financial sector is urged to pass on the benefits of the continued easing of monetary conditions to individuals and businesses adequately and swiftly, thereby supporting the envisaged rebound of the economy.

Full CBSL report : https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20231005_Monetary_Policy_Review_No_7_2023_e_U53s8.pdf (NewsWire)

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The Monetary Board of the Central Bank of Sri Lanka has decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels.

The Central Bank stated that at its meeting held today, its Monetary Board decided to maintain the Standing Deposit Facility Rate and the Standing Lending Facility Rate at their current levels of 15.50 per cent and 16.50 per cent, respectively. 

Issuing a statement, the bank stated that the decision was taken after having considered the recent and expected economic developments, and macroeconomic projections on domestic and global fronts. 

The Board was of the view that the maintenance of the prevailing tight monetary policy stance is necessary to ensure that monetary conditions remain sufficiently tight to facilitate the continuation of the ongoing disinflation process amidst the improvements in market sentiments following the finalisation of the Extended Fund Facility (EFF) from the International Monetary Fund (IMF) and the downward shift in elevated market interest rates reflecting the falling risk premia. 

Full statement: Central Bank Monetary Policy Review (NewsWire)

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