Sri Lanka Central Bank Keeps Key Rate at 8% Amid Economic Recovery

The Central Bank of Sri Lanka has decided to maintain its benchmark interest rate at 8% for the second consecutive meeting, as part of its strategy to support economic recovery following a deep financial crisis. This decision aligns with the bank's commitment to managing inflation, which currently stands at negative 4.2%, while anticipating a return to positive inflation by mid-2025. The Sri Lankan economy displayed resilience, achieving a 5% growth rate in 2024, exceeding previous forecasts. Analysts widely supported the decision, citing expectations of continued benign inflation and a positive growth trajectory. The central bank remains focused on achieving a 5% inflation target by the end of the year while fostering domestic growth. The next policy review is scheduled for May 28, 2025.