The Central Bank of Sri Lanka briefed Members of Parliament on the country’s monetary policy framework, exchange-rate management and recent economic developments at a session held at the Parliament complex on Wednesday, with Governor Dr. Nandalal Weerasinghe leading the presentation.

Held under the patronage of the Speaker, the programme followed a request earlier this month by Deputy Finance Minister Anil Jayantha for a whole-of-Parliament awareness session on monetary policy. MPs were given an opportunity to engage directly with senior CBSL officials and seek clarifications on the topics presented, Newswire reported.

On monetary stance, the Central Bank told MPs that the Overnight Policy Rate had been raised by 100 basis points in May 2026 after about 800 basis points of cumulative cuts since June 2023, and that the latest tightening was “expected to arrest demand-driven inflationary pressures, thus also supporting to anchoring inflation expectations”. Headline inflation has accelerated in recent months, reflecting upward adjustments to domestic fuel and electricity prices amid the Middle East conflict.

The CBSL said growth momentum had been sustained since the third quarter of 2023, with the economy expanding by around 5 percent in both 2024 and 2025. On the rupee, the Central Bank attributed recent depreciation pressure to higher import expenditure — particularly for fuel and vehicles — lower foreign-exchange inflows from tourism, possible delays in the conversion of export earnings in anticipation of further weakness, and importers bringing forward foreign-exchange purchases to hedge against expected currency moves.

The presentation also covered domestic credit and fiscal sector performance. Private-sector credit continued to drive overall credit expansion, while net credit to government and credit to public corporations recorded net repayments in recent periods amid improvements in fiscal discipline. All three key fiscal balances had improved following the implementation of reforms, with revenue-enhancing measures and expenditure rationalisation narrowing the budget deficit.

The CBSL has published the full presentation slides on its website.

Sources: Newswire — CBSL briefs MPs on monetary policy and economic developments.