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The Central Bank of Sri Lanka Publishes the Market Operations Report - December 2025

The Central Bank of Sri Lanka (CBSL) released its latest Market Operations Report (MOR) on 30 January 2026. The MOR aims to enhance stakeholder understanding of the monetary and foreign exchange operations undertaken by the CBSL in the pursuit of implementation of monetary policy under the Flexible Inflation Targeting (FIT) framework, supported by the flexible exchange rate regime.

CCPI based headline inflation accelerated in January 2026

The Colombo Consumer Price Index (CCPI, 2021=100)  based headline inflation (year-on-year, Y-o-Y) accelerated in January 2026 after remaining at the same level for three consecutive months. Accordingly, headline inflation (Y-o-Y) was recorded at 2.3% in January 2026 compared to 2.1% in December 2025, broadly in line with the Central Bank’s near-term projections.

External Sector Performance – December 2025

The current account recorded a marginal surplus in December 2025. Monthly current account surpluses were recorded in most months in 2025. As a result, the current account is estimated to have recorded a surplus of US$ 1.7 billion (provisional) in 2025.

The merchandise trade deficit widened on a year-on-year basis in December 2025. Further, the cumulative trade deficit widened to around US$ 7.9 billion in 2025 compared to 2024, despite export earnings recording a historically high level in 2025.

Sri Lanka PMI - Construction increased in December 2025

The Sri Lanka Purchasing Managers’ Index for Construction     (PMI – Construction), as reflected by the Total Activity Index, increased to 67.1 in December 2025. A majority of firms reported a notable expansion in construction activities during the reference period, despite initial operational disturbances caused by adverse weather conditions.

IMF Staff Concludes Visit to Sri Lanka

At the end of the recent visit to Sri Lanka to assess impact of Cyclone Ditwah by the International Monetary Fund (IMF) staff team led by Mr. Evan Papageorgiou, the IMF issued the following press release on 28 January 2026.

The Central Bank of Sri Lanka keeps the Overnight Policy Rate (OPR) unchanged

The Monetary Policy Board, at its meeting held yesterday, decided to maintain the Overnight Policy Rate (OPR) at the current level of 7.75%. The Board arrived at this decision after carefully considering evolving developments and the outlook on the domestic front and global uncertainties. The Board is of the view that the current monetary policy stance will support steering inflation towards the target of 5%.

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