Central Bank of Sri Lanka keeps the Overnight Policy Rate (OPR) Unchanged

COLOMBO (News 1st) - The Monetary Policy Board, at its meeting held yesterday, decided to maintain the Overnight Policy Rate (OPR) at the current level of 7.75%. 

The Board arrived at this decision after carefully considering evolving developments and the outlook on both domestic and global fronts. 

The Board is of the view that the current monetary policy stance will support steering inflation towards the target of 5%.

Headline inflation based on the Colombo Consumer Price Index (CCPI) continued to accelerate in October for the third consecutive month. 

Inflation is expected to rise more gradually than projected earlier and move towards the target by H2-2026. 
Core inflation is also expected to accelerate at a modest pace, as demand in the economy gradually strengthens. 
Medium-term inflation expectations remain well anchored around the inflation target.

Leading economic indicators suggest a continuation of the growth momentum. 

Credit to the private sector has recorded a notable and broad-based expansion thus far in 2025, supported by the low-interest-rate environment. 

This also reflects a recovery in economic activity as well as the realisation of pent-up demand for vehicle imports. This credit momentum is likely to continue in the period ahead.

Imports have risen in recent months, contributing to a widening trade deficit. However, strong inflows from tourism and workers’ remittances have cushioned the impact on the external current account.

Gross Official Reserves were maintained above USD 6 billion thus far in 2025, supported by net foreign exchange purchases by the Central Bank. 

Expected additional inflows in December 2025 include receipts from the multilateral organisations. 

The recent depreciation pressure on the rupee has subsided with the improvement in foreign exchange liquidity.

The Central Bank will continue to monitor and assess incoming data on evolving domestic and global economic conditions and emerging risks. The Board remains prepared to implement appropriate policy measures to ensure that inflation stabilises around the target, while supporting the economy to reach its potential.

The date of release of the first statement on the monetary policy review for 2026 will be announced in due course.