Monday Feb 16, 2026
Monday Feb 16, 2026
Thursday, 25 September 2025 05:19 - - {{hitsCtrl.values.hits}}
The Central Bank of Sri Lanka (CBSL) yesterday said that its Monetary Policy Board has decided to maintain the Overnight Policy Rate (OPR) at the current level of 7.75% at its meeting held on Tuesday.
“The Board arrived at this decision after carefully considering both domestic and global developments, and was of the view that the current monetary policy stance will support steering inflation towards the target of 5%,” the CBSL said in a statement.
Headline inflation based on the Colombo Consumer Price Index (CCPI) turned positive in August 2025, ending 11 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 with GDP growth estimated at 4.5% for the full year.
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.
CBSL said it has maintained gross official reserves at $ 6.2 billion by end August, amidst debt service payments. The Sri Lanka 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, and remains prepared to implement appropriate policy measures to ensure that inflation stabilises around the target, while supporting the economy to reach its potential,” CBSL said.
The release of the next regular statement on the monetary policy review will be on 26 November 2025.
Central Bank Governor Dr. Nandalal Weerasinghe yesterday said that the recent stagnation of gross official reserves was the result of debt servicing to multilateral lenders like the ADB and World Bank and bilateral swaps.
Gross official reserves amounted to $ 6.2 billion as at end August, unchanged from the previous month.
“We have an aspirational target of $ 7 billion for the full year, but that is not a binding target under the ongoing IMF program,” he said at press briefing yesterday. “What matters is the net international reserve position, and we are maintaining that well above the IMF target.”
Dr. Weerasinghe also addressed the legality of crypto currencies.
He said that while crypto currencies cannot be used as legal tender in Sri Lanka, they may be treated as an asset class for investment, though concerns remain over possible misuse for money laundering.
“There is no law introduced on crypto currency or virtual currency,” he said. “It cannot be used as legal tender in the country as per our Foreign Exchange Act, but it can be used as an asset class, an investment. The problem is, we don’t know if it’s used for money laundering.”
The CBSL Governor also defended the 4.5% economic growth projection for 2025, easing from last year’s 5%. “What matters is the trajectory. Remember, the 5% growth came off a contraction the previous year,” Dr. Weerasinghe said.
He said globally central banks were moving towards a cycle of monetary easing. “That could benefit Sri Lanka if investors want better yields.”
