Monetary Policy Committees

Monetary Policy Committee (MPC)

A primary function of the Central Bank, as stated in the CBA, is the determination and implementation of monetary policy for the country. Over the years, the economy, and in particular the financial sector has strengthened and become sophisticated along with the financial sector reforms and structural changes in the economy. Consequently, the Central Bank's tasks in determining and implementing monetary policy have also increased in complexity. Hence, as a part of the Central Bank's efforts to strengthen monetary policy analysis and formulation and as a step towards improving the transparency of the decision-making process, a formal Monetary Policy Committee (MPC) was established in early 2001.

Currently, the Monetary Policy Committee (MPC) is chaired by the Governor and comprises the following members:

Chairperson

    Governor

Members

• All Deputy Governor/s
• Assistant Governor/s in charge of the Departments of Economic Research, Statistics and Market Operations
• Director of Economic Research
• Director, Statistics
• Director, Market Operations
• Additional Director of Economic Research overseeing Money and Banking

Secretary to the MPC

• Deputy Director of Economic Research overseeing Money and Banking (Alternate Secretary, Head of Division, Money and Banking)

The primary function of the MPC is to evaluate emerging economic developments and macroeconomic projections and to make recommendations on appropriate future directions of monetary policy for consideration by the Monetary Policy Board with a view to achieving the primary objective of the Central Bank of ensuring domestic price stability.

The MPC meets at regular intervals, currently six times per year. At these meetings, members consider reports prepared by the Economic Research Department and other departments on monetary, foreign exchange market and price developments, together with developments in the fiscal, external and real sectors, which would serve as the bases for the deliberations of the MPC, in the formulation of recommendations to the Monetary Policy Board. At present, technical inputs provided by the Economic Research Department are based on comprehensive economic and monetary analyses including macroeconomic forecasts, particularly for inflation.

The Stakeholder Engagement Committee (SEC) of the Central Bank of Sri Lanka (CBSL) was established in July 2022 by replacing the Monetary Policy Consultative Committee (MPCC) and the Financial System Stability Consultative Committee (FSSCC) of the CBSL which were in operation previously. The Committee consists of a cross-section of stakeholders including eminent professionals, academics, and private sector personnel so that the Central Bank benefits from their expertise and experience in its policy decision-making process.