Central Bank of Sri Lanka maintains policy rate at current level

The Monetary Policy Board, at its meeting held yesterday, decided to maintain the Overnight Policy
Rate (OPR) at the current level of 8.75%.

The Board arrived at this decision after carefully considering the evolving conditions and outlook on the domestic and global fronts. The Board paid particular attention to the effects of the proactive monetary policy tightening in May 2026 alongside other measures that had already materialised to a large extent. The Board also recognised the uncertainty arising from evolving geopolitical tensions in the Middle East and potential risks associated with El Niño conditions on the economy.

Domestic economic activity remained resilient, recording a real growth rate of 4.7% (y-o-y) in the first half of 2026. Headline inflation is projected to remain in high single digits through Q1-2027, before easing towards the 5% target.

Gross Official Reserves rose to USD 6.9 bn at the end of August 2026, supported by net foreign exchange purchases by the Central Bank.