FX.co ★ Sri Lanka Keeps Policy Rate at 8%

In its March 2025 meeting, the Central Bank of Sri Lanka decided to maintain its benchmark interest rates at 8.00%, underscoring its dedication to attaining a 5% inflation target while fostering economic growth. Current inflation rates are negative, influenced by reductions in electricity tariffs and fuel prices; however, these deflationary pressures are anticipated to decline starting March 2025. Inflation is expected to move into positive territory by mid-year and achieve the targeted level by the end of the year. In terms of Gross Domestic Product (GDP), Sri Lanka witnessed a robust economic recovery in 2024 after experiencing two years of contraction. Key economic indicators suggest this upward trend will persist, supported by a drop in market interest rates and strong growth in private sector lending. Additionally, the central bank maintained the Standing Lending Facility Rate at 8.50% and the Standing Deposit Facility Rate at 7.50%. The board reaffirmed its commitment to a data-driven and forward-looking strategy, remaining alert to global trade dynamics and geopolitical uncertainties. The next policy review is slated for May 28, 2025.