The Central Bank of Sri Lanka (CBSL) has decided to keep the Overnight Policy Rate (OPR) steady at 7.75% following its Monetary Policy Board meeting held on January 27.
In a statement, the Central Bank said the decision was taken after assessing recent domestic economic trends alongside prevailing global uncertainties. The Board believes the existing monetary policy framework is appropriate to guide inflation towards its medium-term target of 5%.
Headline inflation, as measured by the Colombo Consumer Price Index (CCPI), stood unchanged at 2.1% in December 2025. However, food prices recorded a modest increase compared to November, largely due to supply disruptions caused by Cyclone Ditwah and heightened seasonal demand during the festive period.
According to the CBSL, inflation is expected to rise gradually and reach the targeted 5% level by the second half of 2026. Core inflation—which excludes volatile components such as food, energy, and transport—has also shown an upward trend in recent months. The Central Bank noted that this is likely to continue as overall demand in the economy strengthens.
On the growth front, Sri Lanka’s economy expanded by 5.0% during the first nine months of 2025. Although economic activity slowed following Cyclone Ditwah towards the end of the year, early indicators suggest the economy is showing resilience. In addition, lending to the private sector by banks and other financial institutions continued to grow strongly in late 2025.
The Monetary Policy Board reiterated that it stands ready to adjust policy measures if necessary to ensure inflation remains aligned with the target, while supporting sustainable economic growth.
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