The Central Bank of Sri Lanka (CBSL) has decided to maintain the Overnight Policy Rate (OPR) at 7.75%, following its Monetary Policy Board meeting held yesterday (23 September 2025).
The Board stated that the current policy stance remains consistent with steering inflation toward the 5% target, taking into account both domestic and global conditions.
Headline inflation, based on the Colombo Consumer Price Index (CCPI), turned positive in August 2025, ending eleven months of deflation. Inflation is projected to gradually rise toward the 5% target by mid-2026. Reflecting strengthening domestic demand, core inflation is also expected to pick up and stabilize around the headline inflation target. Medium-term inflation expectations remain anchored around the target.
The economy is estimated to have grown by 4.8% in the first half of 2025, with leading indicators suggesting a continuation of this momentum into the third quarter. Private sector credit has recorded broad-based expansion, supported by the low-interest-rate environment and the recovery in economic activity. This expansion is expected to further support domestic growth in the period ahead.
The external sector remained resilient, supported by improved inflows from tourism and workers’ remittances, despite a widening trade deficit. Continued net foreign exchange purchases by the CBSL have helped maintain gross official reserves at USD 6.2 billion by end-August, amid debt service obligations. The Sri Lanka rupee remains broadly stable. All three major rating agencies have upgraded Sri Lanka’s sovereign ratings, reflecting an improved credit standing. Global financial conditions have eased, although geopolitical uncertainties persist.
The Board will continue to monitor developments both domestically and globally and is prepared to implement appropriate policy measures to ensure inflation stabilizes around the target while supporting the economy’s potential growth.
The next regular monetary policy statement is scheduled for 26 November 2025, the CBSL added.
