Central Bank 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 (25).

The Board arrived at the decision after considering the evolving developments and the outlook on both domestic and global fronts, the CBSL said. The Board is of the view that the current monetary policy stance will support steering inflation towards the target of 5%.

Headline inflation based on the Colombo Consumer Price Index (CCPI) continued to accelerate in October for the third consecutive month. Inflation is expected to rise more gradually than projected earlier and move towards the target by H2-2026, according to the Central Bank.

Core inflation is also expected to accelerate at a modest pace, as demand in the economy gradually strengthens. Medium-term inflation expectations remain well anchored around the inflation target.

The Central Bank noted that leading economic indicators suggest a continuation of the growth momentum adding credit to the private sector has also recorded a notable and broad-based expansion thus far in 2025, supported by the low-interest-rate environment.

The Central Bank said it will continue to monitor and assess incoming data on evolving domestic and global economic conditions and emerging risks. The Monetary Policy 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 CBSL added.