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Central Bank Expected to Hold Rates Ahead of IMF Review
27 Jan, 2026
The Central Bank of Sri Lanka (CBSL) is widely expected to keep its key interest rate at 7.75% on Wednesday, according to a Reuters poll, as an IMF delegation reviews the sixth tranche of a $2.9 billion assistance package.
All surveyed economists cited stable inflation, healthy credit growth, and steady economic expansion as reasons for maintaining the benchmark rate. The CBSL has held rates steady since May, supporting recovery from the 2022 financial crisis driven by a severe dollar shortage.
Sri Lanka’s recovery was affected by Cyclone Ditwah in November, which claimed 649 lives and impacted nearly 10% of the population. The World Bank estimates damage to infrastructure and housing at US$4.1 billion. The IMF recently downgraded 2026 growth projections from 3.1% to 2.9% and expects inflation to reach 5.4%, slightly above the CBSL’s 5% projection.
The IMF approved $206 million in emergency funding to support cyclone recovery. CBSL anticipates 4–5% economic growth this year, aided by public spending, including Rs. 500 billion approved by Parliament to assist affected communities.
The IMF delegation concludes its fact-finding mission on Wednesday, after assessing fiscal, monetary, and recovery measures.
Source: Reuters
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