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The Central Bank of Sri Lanka continues its Accommodative Monetary Policy Stance

The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 19 August 2020, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 4.50 per cent and 5.50 per cent, respectively. The Board recognised the necessity to continue the accommodative monetary policy stance, particularly as market lending rates are yet to reflect the full passthrough of policy easing measures implemented thus far. The Board decided to adopt targeted measures to reduce specific interest rates that it considered to be excessive, which would help marginal borrowers. The Board anticipates a further reduction in overall market lending rates, thereby encouraging borrowing for productive economic activity and reinforcing support for COVID-19 hit businesses as well as the broader economy, given the conditions of subdued inflation.

Sri Lanka Purchasing Managers’ Index - July 2020

Purchasing Managers' Indices for both Manufacturing and Services activities continued to expand in July 2020, compared to June 2020 benefitting from the normalising of economic activities.

Reflecting that manufacturing activities are gradually approaching the pre-COVID levels with the normalization of business activities, the Manufacturing PMI continued to expand in July 2020 recording 64.6 mainly due to the expansion in New Orders and Production sub-indices.

Services sector continued to expand for the second consecutive month with PMI reaching 51.4 in July 2020. This was underpinned by the expansions observed in New Businesses, Business Activities and Expectations for Activity compared to June 2020 indicating a further recovery in the services sector, which was affected by COVID-19 pandemic.

External Sector Performance - June 2020

Sri Lanka’s external sector stabilised further in June 2020, with the gradual normalisation of domestic economic activity. The trade deficit declined in June 2020 (year-on-year), with a more than expected rebound in merchandise exports and notable reduction in merchandise imports on account of restrictions on non essential imports. Workers’ remittances recorded a growth in June, for the first time since the outbreak of the COVID-19 pandemic. During the month, both the government securities market and the Colombo Stock Exchange (CSE) recorded some outflows. Supported by the reduction in the trade deficit, the Sri Lankan rupee recorded a marginal appreciation during June 2020.

CCPI based Inflation increased in July 2020

Headline inflation as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100) increased to 4.2 per cent in July 2020 from 3.9 per cent in June 2020. This was mainly driven by monthly increase of prices of items in Non-food category along with the statistical effect of the low base prevailed in July 2019. Food inflation (Y-o-Y) increased to 10.9 per cent in July 2020 from 10.0 per cent in June 2020. Further, Non-food inflation  (Y-o-Y) also increased marginally to 1.5 per cent in July 2020 from 1.4 per cent in June 2020.

The Central Bank of Sri Lanka Denies Media Reports on Macroeconomic Projection Updates

Several media reports have been brought to the notice of the Central Bank of Sri Lanka (CBSL) in which certain macroeconomic projections are erroneously attributed to the CBSL. 

The CBSL has not released to the public any update to its macroeconomic projections since the publication of the CBSL Annual Report in April 2020. Given the conditions of uncertainty created by the COVID-19 pandemic, frequent updates to macroeconomic projections are required, and the CBSL has continued to monitor standard indicators of economic activity as they become available. It has been using unconventional indicators as well on a real time basis in its analysis and policy guidance. 

The Central Bank enters into a Bilateral Currency Swap Agreement with the Reserve Bank of India

The Central Bank of Sri Lanka (CBSL) and the Reserve Bank of India (RBI) have entered into a currency swap agreement on 24th July 2020 under the Framework on Currency Swap Arrangement for South Asian Association for Regional Cooperation (SAARC) countries for 2019 - 2022. This would provide short-term financing to the CBSL to meet the country’s balance of payment requirements.

The intention of the CBSL in entering into this Swap agreement was to be able to maintain a sufficient short-term foreign exchange liquidity while preserving the foreign currency reserve position of the country intact. The challenging external economic environment of Sri Lanka today is the result largely of this Covid-19 pandemic. This Swap agreement has the approval of the Cabinet of Ministers, received on the recommendation of the Monetary Board of the Central Bank of Sri Lanka.

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Press Releases

30.06.2025 External Sector Performance - May 2025
30.06.2025 Inflation in June 2025 - CCPI
30.06.2025 Sri Lanka Purchasing Managers’ Index (Construction) - May 2025
30.06.2025 Open Market Operations - 30 June 2025
30.06.2025 Treasury Bond Issuance held on 27 June 2025
27.06.2025 Treasury Bond Issuance held on 27 June 2025

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Treasury Bills/Bonds for Foreign/Non-Resident Investors

Sri Lanka Development Bonds

T-bills and T-bonds Primary Auction Calendar

Secondary Market Trade Summary

LankaSecure Services

GOSL Outstanding Debt Securities

Daily Report

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Notices

27.06.2025 Rs. 113,000 million Treasury bills are to be issued through an auction on 02nd July 2025
26.06.2025 Calling for bids for media buying services for the “Collective digital payments promotion campaign by banks - 2025”
24.06.2025 Issue of Rs.295,000 million Treasury Bonds
22.06.2025 Expression of Interest (EOIs) for Procurement of Services for Revamping the Internal Communication Platform of the Central Bank of Sri Lanka
20.06.2025 Rs. 65,000 million Treasury bills are to be issued through an auction on 25th June 2025
15.06.2025 Calling bids for the purchase and removal of obsolete, used, unserviceable and surplus items stored at the Central Bank of Sri Lanka

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