The Central Bank of Sri Lanka (CBSL) has published its first Monetary Policy Report for 2025, outlining key developments and projections for the economy.
The report highlights that the monetary policy stance was further eased in late 2024, with an accommodative approach continuing into January 2025.
CBSL also introduced a single policy interest rate mechanism, designating the Overnight Policy Rate as its primary monetary policy tool.
Headline inflation (year-on-year) remained negative since September 2024, primarily due to significant reductions in energy prices. However, after a period of near-term deflation in early 2025, inflation is expected to rise and stabilize at the target level of 5% over the medium term.
Economic activity showed signs of recovery in 2024, supported by improved investor confidence and favorable monetary conditions.
The report further emphasizes that with the implementation of structural reforms and growth-oriented policies, this positive momentum is expected to continue.
