CBSL decides to keep policy rate unchanged
The Central Bank of Sri Lanka (CBSL) has decided to maintain the Overnight Policy Rate (OPR) at 7.75%, following its latest Monetary Policy Board meeting held yesterday (23).
The decision comes as the Board assessed both domestic and global conditions, noting that the current policy stance remains consistent with steering inflation towards the 5% target, the CBSL said.
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 pickup, and stabilise thereafter around the headline inflation target. Medium term inflation expectations remain anchored around the inflation target, it said.
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 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. 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, the CBSL added.