The Central Bank of Sri Lanka (CBSL) has decided to keep the Overnight Policy Rate (OPR) unchanged at 7.75%, following the Monetary Policy Board’s meeting held yesterday (27).
Announcing the decision, the CBSL said the Board carefully assessed recent domestic economic developments alongside prevailing global uncertainties before maintaining the current monetary policy stance.
The Board noted that the existing policy setting remains appropriate to guide inflation toward the medium-term target of 5%. Inflation, as measured by the Colombo Consumer Price Index (CCPI), stood unchanged at 2.1% in December 2025. However, food prices recorded a modest increase compared to November, reflecting supply chain disruptions caused by Cyclone Ditwah and heightened seasonal demand during the festive period.
Looking ahead, the Central Bank projects inflation to rise gradually and converge toward the 5% target by the second half of 2026.
Core inflation—which excludes volatile food, energy and transport components from the CCPI basket—has also shown a gradual pickup in recent months. The CBSL expects this trend to continue as economic demand strengthens further.
On the growth front, the economy expanded by 5.0% during the first nine months of 2025. While economic activity slowed following Cyclone Ditwah in late 2025, early indicators point to increased resilience. The Central Bank also highlighted that credit extended to the private sector by commercial banks and other financial institutions continued to record strong growth toward the end of the year.
The Monetary Policy Board reiterated that it stands ready to take appropriate policy action, if required, to ensure inflation remains anchored around the target while supporting the economy in achieving its full potential.
