The Central Bank released its second Monetary Policy Report for 2024 in keeping with the requirements of the Central Bank of Sri Lanka Act, No. 16 of 2023. The content of this Report is based on information that the Monetary Policy Board of the Central Bank considered in formulating the monetary policy decision during the July 2024 review.
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The Central Bank of Sri Lanka releases the Monetary Policy Report – August 2024
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Sri Lanka Purchasing Managers’ Index (Manufacturing and Services) - July 2024
Purchasing Managers’ Indices indicate expansions in both Manufacturing and Services activities in July 2024.
Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded an index value of 59.5 in July 2024, indicating a continuous expansion in manufacturing activities. All sub-indices contributed positively to this improvement.
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Financial Intelligence Unit of Sri Lanka entered into a Memorandum of Understanding with the Registrar General of the Registrar General’s Department
The Financial Intelligence Unit (FIU) of Sri Lanka entered into a Memorandum of Understanding (MOU) with the Registrar General of the Registrar General’s Department on August 06, 2024 at the Central Bank of Sri Lanka (CBSL) to receive information on Trusts, property registrations and any suspicious activities relating to Trusts and property registrations in relation to Money Laundering (ML), Terrorist Financing (TF) and related crimes. This MOU has been entered into by the FIU, in terms of the provisions of the Financial Transactions Reporting Act, No. 6 of 2006.
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IMF Staff Concludes Visit to Sri Lanka
An International Monetary Fund (IMF) Mission led by Senior Mission Chief Mr. Peter Breuer visited Sri Lanka from July 25 to August 2, 2024, to discuss recent macroeconomic developments and progress in implementing economic and financial policies under Sri Lanka’s economic reform program supported by the IMF’s Extended Fund Facility (EFF) arrangement.
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The Central Bank of Sri Lanka publishes its inaugural Market Operations Report
The Central Bank of Sri Lanka (the Central Bank) released its inaugural Market Operations Report (MOR) with the aim of enhancing awareness and knowledge among the stakeholders on monetary operations carried out by the Central Bank in line with the prevailing monetary policy stance. The MOR would be a catalyst to improve transparency and accountability of the Central Bank under the Flexible Inflation Target (FIT) framework by effectively communicating the monetary policy implementation process.
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External Sector Performance June 2024
External sector performance in the first half of 2024 remained positive, with higher inflows in the form of workers’ remittances and earnings from tourism, despite a slightly higher trade deficit.
Merchandise trade deficit ( Y-o-Y ) widened in June 2024, although it narrowed compared to May 2024.
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CCPI based headline inflation accelerated, yet remained below the target, in July 2024
Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100)1 was recorded at 2.4% in July 2024. Inflation continued to remain below the targeted level of 5% even after this acceleration.
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SL Purchasing Managers’ Index (PMI) for Construction Industry – June 2024
Sri Lanka Purchasing Managers’ Index for Construction (PMI – Construction) reached 59.5 in June 2024, recording its highest index value in thirty consecutive survey rounds. Most of the respondents highlighted that the industry is mainly driven by projects funded by multilateral agencies, particularly related to road rehabilitation and water distribution.
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The Central Bank of Sri Lanka Further Reduces Policy Interest Rates
The Monetary Policy Board of the Central Bank of Sri Lanka, at its meeting held on 23 July 2024, decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 25 basis points (bps) to 8.25 per cent and 9.25 per cent, respectively.
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Purchasing Managers’ Indices indicate expansions in both Manufacturing and Services activities in June 2024
Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded an index value of 56.6 in June 2024, indicating an expansion in manufacturing activities. All the sub-indices, except for employment, remained above the neutral threshold during the month.