The Central Bank of Sri Lanka maintains the policy rate at the 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. Leading economic indicators point towards continued momentum, although global and climate-related uncertainties could weigh on the outlook. Although growth of credit to the private sector is gradually moderating in response to recent policy measures, credit flows are expected to remain sufficient to support economic activity. Headline inflation rose to 8.0% (y-o-y) in August 2026, reflecting the pass-through of the energy shock across m...