The Central Bank of Sri Lanka (CBSL) is expected to maintain its key interest rate at 7.75% on Wednesday, a Reuters poll found, as an International Monetary Fund delegation reviews the sixth tranche of a crucial $2.9 billion package.

The poll of a dozen economists unanimously forecast no change to the benchmark overnight policy rate, citing stable inflation, healthy credit growth, and consistent economic expansion.

The Central Bank of Sri Lanka has held rates steady since last May, as the nation recovers from a 2022 financial crisis driven by a severe dollar shortage.

But Sri Lanka’s tentative recovery was impacted by Cyclone Ditwah, which killed 649 people and affected nearly 10% of the 22 million population, in late November.

Damage to houses, roads and other critical infrastructure has been estimated at US$ 4.1 billion by the World Bank.

The IMF downgraded Sri Lanka’s growth for 2026 from 3.1% to 2.9% last month and warned inflation would reach 5.4%, slightly higher than the central bank’s projection of 5%.

Inflation was 2.1% at the end of 2025.

The global lender also approved $206 million in emergency funding to Sri Lanka to assist with immediate recovery efforts.

The IMF delegation will wrap up their fact-finding mission on Wednesday.

The CBSL expects 4%-5% growth for this year, partly supported by higher public spending to rebuild after the cyclone. Parliament also approved Rs. 500 billion in additional spending last month to support cyclone-affected people.

Source: Reuters

- Agencies