Sri Lanka Interest Rate

The Central Bank of Sri Lanka kept its benchmark interest rates unchanged at 8.00% during its January 2025 meeting to keep the inflation rate at 5% target over the medium term while fostering economic recovery. Current deflationary trends, driven by energy price cuts, are expected to persist in the near term, with inflation projected to turn positive and near the target in late 2025. On the GDP front, Sri Lanka's economy grew strongly in 2024, with 5.5% YoY GDP expansion in Q3, following 4.7% in Q2. This momentum is anticipated to continue into 2025, supported by declining market lending rates, improved business confidence, and expanding private sector credit. The central bank also held the Standing Lending Facility Rate at 8.50%, while the Standing Deposit Facility Rate remains at 7.50%. The board reiterated its commitment to monitoring inflation and economic variables to ensure domestic price stability and sustained growth.