• Sri Lanka's Central Bank is expected to hold policy rates until the 2025 Budget, awaiting clarity on fiscal targets agreed with the IMF, despite having room to ease rates further.

Bloomberg Economics suggests that Sri Lanka's Central Bank is likely to maintain current policy rates until the 2025 Budget, which will outline fiscal targets agreed with the IMF. Despite having room to ease, the bank held rates at 9.25% (lending) and 8.25% (deposit) on Friday, signaling a preference to await clarity on the new president's fiscal plans. Any divergence between the government and IMF could impact markets and the rupee. While inflation-adjusted real rates remain high, dampening demand, Bloomberg expects rate cuts in early 2025 after the budget is passed.

CB likely to hold rates till Budget 2025 | The Morning