Sri Lanka Central Bank Governor Nandalal Weerasinghe expects the country's inflation to slow back to the central bank's 5% target in the second half of this year and continue into next year, even as oil prices remain elevated. Speaking in an interview in Sydney, Australia, he said current stability partly reflects monetary policy measures taken in May, including a full percentage point policy rate hike and government import controls. Weerasinghe said that if oil prices stay around 80 dollars a barrel through the end of the year, Sri Lanka will be able to manage the situation, and he expects the economy to slow to around 4 to 5 percent in the second half of this year amid risks from the conflict between the United States and Iran. He also said Sri Lanka expects to complete its four-year IMF programme in the second half of 2027, with the next review scheduled for around November or December this year.
Central bank expects inflation to hit 5% target, reflecting policy measures and stability, which is positive for Sri Lankan bonds.
