FX.co ★ Sri Lanka Holds Policy Rate at 7.75%

The Central Bank of Sri Lanka decided to maintain its key interest rate at 7.75% during its meeting in November 2025, emphasizing that the current rate is suitable for steering inflation towards the 5% target. Inflation figures for October showed continued acceleration, with expectations of a gradual increase before eventually aligning with the target in the latter half of 2026. Core inflation is anticipated to rise slightly due to strengthening demand, though medium-term expectations remain stable. Economic indicators suggest a steady growth trajectory, bolstered by widespread expansion in private-sector credit, facilitated by the low-interest-rate environment, and increased demand, particularly for vehicle imports. While there has been a recent rise in imports leading to a widening trade deficit, strong tourism and remittances from abroad have helped mitigate external economic pressures.