📉 Central Bank Keeps Overnight Policy Rate Unchanged at 8.75%

• Monetary Policy Decision • Overnight Policy Rate (OPR) maintained at 8.75% following the Monetary Policy Board meeting. • Decision reflects previous policy tightening in May 2026 and its ongoing transmission to moderate credit growth. • Domestic Inflation & Growth • Headline inflation accelerated to 6.8% (y-o-y) in June 2026 due to higher domestic energy and food prices. • Inflation expected to remain above the 5.0% target in the near term before gradually returning to target levels. • Strengthening demand conditions and supply-driven shocks continue to affect price levels, though medium-term inflation expectations remain anchored. • External Sector & Reserves • Gross Official Reserves stood at US$ 6.45 Bn at end-June 2026 amid ongoing foreign debt service obligations. • Current account deficit recorded since April 2026, driven by higher fuel import costs widening the merchandise trade deficit alongside slowing tourism earnings. • External sector pressures cushioned by resilient workers' remittances and recent policy measures stabilizing the Sri Lanka rupee.