Sri Lanka Interest Rate

The Central Bank of Sri Lanka kept its benchmark interest rate unchanged at 7.75% during its September 2025 meeting, aiming to steer inflation toward the 5% target while supporting economic growth. Headline inflation turned positive in August after eleven months of deflation and is projected to gradually rise toward target by mid-2026, with core inflation expected to stabilize around that level. The economy also expanded 4.8% in the first half of 2025, with momentum carrying into Q3, underpinned by broad-based private sector credit growth. On the external front, improved tourism and remittance inflows offset a wider trade deficit, helping reserves remain stable at USD 6.2 billion by end-August. Reflecting these gains, major rating agencies raised Sri Lanka’s sovereign ratings, underscoring improved credit standing. The next policy review is scheduled for November 26, 2025.