The External Sector of the Sri Lankan economy improved notably in 2024, with the robust inflows to the current account for the second consecutive year and strengthened reserves.

The Monetary Policy Board of the Central Bank of Sri Lanka, at its meeting held on 28 January 2025, decided to maintain the Overnight Policy Rate (OPR) of the Central Bank at its current level of 8.00 per cent. The Board arrived at this decision following a careful analysis of the current and expected macroeconomic developments on the domestic and global fronts. This decision was made with a medium-term view of ensuring that inflation converges to the target of 5 per cent, while supporting the economy to reach its potential. The Board observed that the current period of deflation, as projected earlier, has largely been an outcome of administratively determined energy price reductions. This trend is expected to continue over the next few months before inflation begins adjusting towards the targeted level in the second half of 2025.