Former United National Party (UNP) Deputy Leader and Member of Parliament Ravi Karunanayake has urged the government to begin preparations for the statutory review of Sri Lanka’s Monetary Policy Framework Agreement scheduled for October 2026, describing it as a key opportunity to strengthen the country’s long-term economic stability.
In a letter addressed to President and Minister of Finance Anura Kumara Dissanayake, Karunanayake said the upcoming review provides an opportunity to reinforce the stability of the Sri Lankan rupee, protect household savings, and reduce the risk of future balance of payments crises.
Among his key proposals, the MP recommended reducing the country’s medium-term inflation target from the current 5 percent to a range of 2–3 percent, arguing that a lower inflation target would better support long-term price stability and preserve the purchasing power of citizens.
Karunanayake emphasized that the government should commence the necessary policy discussions and technical preparations well in advance of the scheduled review.
Under the current Monetary Policy Framework Agreement, the Central Bank of Sri Lanka (CBSL) aims to maintain headline inflation at 5 percent over the medium term.
The existing framework was established under the Central Bank of Sri Lanka Act No. 16 of 2023 and was formally implemented through an agreement signed on October 5, 2023, between then Finance Minister Ranil Wickremesinghe and Central Bank Governor Dr. P. Nandalal Weerasinghe.
In accordance with the Act, the inflation target and other key parameters of the monetary policy framework are required to be reviewed every three years. The next statutory review is therefore scheduled for October 2026.
Karunanayake said the review presents an important opportunity to ensure that Sri Lanka’s monetary policy framework remains aligned with the country’s evolving economic conditions and long-term development objectives.
