📈 CBSL Releases Market Operations Report for H1 2026

• Monetary Policy & Interest Rates The Central Bank of Sri Lanka (CBSL) tightened its monetary policy stance during the first half of 2026 under the Flexible Inflation Targeting framework. This tightening, alongside macroprudential and foreign exchange measures, helped safeguard price stability and external sector stability. Short-term interest rates adjusted upward in response, demonstrating effective monetary transmission. • Liquidity & Money Market Operations Surplus liquidity in the domestic money market persisted, supported primarily by net foreign exchange purchases by the CBSL despite intermittent dips. Central Bank holdings of Government securities saw a marginal decline. Refinements to the Statutory Reserve Requirement framework strengthened reserve management, while currency in circulation and reserve money increased. • Foreign Exchange & Currency Movements The domestic exchange rate experienced depreciation pressures during H1 2026 due to heightened global uncertainties and elevated foreign exchange demand. CBSL interventions in the foreign exchange market focused on curtailing volatility and accumulating reserves at opportune times. Interbank foreign exchange market activity moderated during the period before improving toward the end of H1 2026. • Banking Sector & Deposits Growth in rupee deposits moderated across the banking sector during the first half of 2026, while monetary operations remained aligned to manage liquidity and support orderly market conditions.