The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 02 August 2018, decided to maintain policy interest rates at their current levels. Accordingly, the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) of the Central Bank will remain at 7.25 per cent and 8.50 per cent, respectively. The Board’s decision is consistent with its aim of stabilising inflation at mid-single digit levels in the medium term, thereby contributing to a high and sustainable growth trajectory of the Sri Lankan economy. In arriving at its decision, the Board carefully considered the current and expected domestic and global economic developments. 

Headline Inflation, as measured by the change in the National Consumer Price Index (NCPI, 2013=100), which is compiled by the Department of Census and Statistics (DCS), increased to 2.5 per cent in June 2018 from 2.1 per cent in May 2018, on year-on-year basis, mainly driven by monthly increase in the prices of items in the Food category. The change in the NCPI measured on an annual average basis decreased from 5.7 per cent in May 2018 to 5.3 per cent in June 2018.

When monthly change is considered, the NCPI increased from 124.3 index points in May 2018 to 126.5 index points in June 2018 largely due to the increase in prices of the items in the Food category, particularly that of vegetables, fresh fish, green chillies, and potatoes. Meanwhile, within the Non-food category, prominent price increase was observed in Transport category mainly due to the upward administered price revisions to petrol, diesel and bus fare.