The Central Bank of Sri Lanka (CBSL) is likely to keep its main interest rate at 7.75% this Wednesday, according to a Reuters poll. This decision comes as an International Monetary Fund (IMF) team reviews the sixth part of a vital $2.9 billion financial package. The poll included twelve economists, all of whom agreed that the benchmark overnight policy rate would remain unchanged. They pointed to stable inflation, strong credit growth, and steady economic growth as reasons for this prediction. Since May, the Central Bank of Sri Lanka has not changed its rates as the country works to recover from a financial crisis in 2022 that was caused by a serious shortage of dollars. However, Sri Lanka's slow recovery faced challenges due to Cyclone Ditwah, which resulted in 649 deaths and affected nearly 10% of the country’s 22 million people last November. The World Bank estimated the damage to homes, roads, and other vital infrastructure at $4.1 billion. Last month, the IMF reduced Sri Lanka's growth forecast for 2026 from 3.1% to 2.9% and warned that inflation could hit 5.4%, slightly above the central bank’s estimate of 5%. By the end of 2025, inflation was recorded at 2.1%. Additionally, the IMF has approved $206 million in emergency funds for Sri Lanka to help with immediate recovery efforts. The IMF team is expected to conclude their fact-finding mission on Wednesday.
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