Sri Lanka’s monetary authority has kept its benchmark overnight rate unchanged as inflation remains above target and external risks persist.
The Central Bank of Sri Lanka has maintained the Overnight Policy Rate at 8.75%, leaving its monetary-policy stance unchanged at the July review. Newswire listed the decision among its latest reports on 22 July.
The decision follows the 100-basis-point increase announced in May, when the Central Bank tightened policy in response to higher energy prices, stronger credit growth and pressure on inflation and the external sector.
Headline inflation accelerated in June, while renewed Middle East tensions and elevated petroleum prices continued to create risks for domestic prices, trade and the exchange rate. The Central Bank expects inflation to remain above its 5% target in the near term before easing gradually.
Holding the rate steady allows policymakers to assess how the earlier increase is affecting credit, demand and inflation expectations. Future decisions will depend on incoming price, external-sector and financial-market data.
