P Nandalal Weerasinghe: Central Bank of Sri Lanka's policy agenda for 2025 and beyond
Speech by Dr P Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, Colombo, 8 January 2025.
Sri Lanka has made a significant recovery after enduring its worst economic crisis in history. Macroeconomic stability that was restored through decisive policy action and collective resolve has laid the foundation for a stronger, more resilient economy. Leveraging on the stability achieved, the country is making notable progress by continuing with the economic reform agenda, strengthening its economic buffers, institutions and governance, and building overall resilience for potential headwinds. Significant progress was made on the fronts of debt restructuring as well as the Extended Fund Facility (EFF) arrangement with the International Monetary Fund (IMF). Faster-than-expected recovery in domestic economic activity was supported by renewed business and consumer confidence. General price levels have adjusted down following a period of high inflation, enabling the continuation of the eased monetary policy stance. External buffers have been built, supported by improved foreign exchange inflows amidst the flexible exchange rate regime. A notable improvement in the fiscal sector performance was witnessed along with efforts to enhance support extended to the poor and vulnerable. Financial system stability was reinforced through the strengthening of the regulatory framework and improved risk management and monitoring.