Central Bank of Sri Lanka keeps overnight policy rate unchanged

The overnight policy rate, introduced in November, was held steady at 8 per cent.

"The Board remains confident that the prevailing monetary policy stance will ensure that inflation will move towards the target of 5 per cent while supporting the growth of the domestic economy," the central bank said in a statement.

The country witnessed 5-per cent gross domestic product (GDP) growth last year and the central bank expects growth to be above 3 per cent this year. It had plunged to its worst financial crisis in decades three years ago.

The country’s consumer price index contracted by 4.2 per cent year on year (YoY) in February.

Inflation is expected to reach positive territory by mid-2025 and track closer to the central bank’s 5-per cent target, the statement noted.

Risks to the inflation and growth outlook remain broadly in balance, it added.

Fibre2Fashion News Desk (DS)