Sri Lanka’s headline inflation, measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100), dropped sharply to 0.5% in August 2024 from 2.4% in July 2024. This significant decline aligns with the Central Bank of Sri Lanka’s (CBSL) projections. Food inflation (Y-o-Y) decreased to 0.8% in August from 1.5% in July,
Sri Lanka’s consumer prices in the capital Colombo increased by 2.4% in the 12 months to July 2024. However, the central bank’s deflationary policy, which began impacting the balance of payments in September 2022, has only resulted in a 2.8% rise over the past 22 months. In July, the Colombo Consumer Price Index (CPI) fell
The Central Bank has reduced its key policy rates by 25 basis points, bringing the Standing Lending and Deposit Facility rates to 9.25% and 8.25%, respectively. This adjustment, while largely symbolic, underscores the Bank’s commitment to an easing monetary policy. Since shifting to a more relaxed policy stance in June 2023, the Central Bank has