Sri Lanka’s inflation is expected to remain around 8% during the rest of this year and early 2027, before gradually returning to the Central Bank’s 5% target after the second quarter of 2027, CBSL Governor Nandalal Weerasinghe stated.

The Monetary Policy Board has maintained the Overnight Policy Rate at 8.75%, citing evolving domestic and global economic conditions, including geopolitical tensions in the Middle East and potential El Niño risks.

The Sri Lankan economy grew 4.7% year-on-year during the first half of 2026, while private-sector credit growth has gradually moderated following recent policy measures.

Weerasinghe stated that monetary and fiscal policy measures would be used as necessary to minimise the impact of elevated inflation and other emerging economic risks.