The Monetary Policy Board of the Central Bank of Sri Lanka (CBSL) has opted to maintain the Overnight Policy Rate (OPR) at 8.00%, expressing confidence in its current monetary stance to guide inflation toward the 5% target while supporting economic growth. This decision was made during the board’s meeting on March 25.
CBSL highlighted that inflation remains negative due to reductions in electricity tariffs and fuel prices, but deflationary conditions are expected to ease from March 2025. Inflation is projected to turn positive by mid-2025, potentially reaching the 5% target by year-end. The domestic economy showed strong recovery in 2024 following two years of contraction, and the momentum is anticipated to continue.
Market interest rates have fallen, and credit to the private sector has grown, driven by the eased monetary policy. Strong exports, increased imports, and improved earnings from tourism and remittances have positively impacted the external sector, despite a slight depreciation of the Sri Lankan rupee in 2025.
While risks related to global trade and geopolitical uncertainties remain, CBSL assured that its monetary policy approach will remain data-driven and forward-looking, prepared to address any emerging risks to maintain price stability and support economic growth.
The next monetary policy review is scheduled for May 28, 2025.
