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CB reduces interest rates

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The Monetary Board of the Central Bank has decided to reduce the Standing Deposit Facility Rate and the Standing Lending Facility Rate by 200 basis points to 10.00 percent and 11.00 percent respectively, a statement from it said on Thursday.

The central bank said it took this decision at the monetary board meeting held on Wednesday.

The central bank said the monetary board arrived at this decision following a careful analysis of the current and expected developments, including low inflation and benign inflation expectations in the domestic economy, with the aim of stabilizing inflation at the envisaged five percent level in the medium term, thereby enabling the economy to reach its potential growth.

The monetary board expects that this reduction of policy interest rates, along with the significant easing of monetary policy effected previously, including the directions issued by the Central

Bank to licensed banks to reduce interest rates, and the significant reduction of risk premia on government securities, would accelerate the downward adjustment in market interest rates, particularly lending rates, in the period ahead.

The central bank said the financial sector is urged to pass on the benefits of the continued easing of monetary conditions to individuals and businesses adequately and swiftly, thereby supporting the envisaged rebound of the economy.

Colombo Consumer Price Index (CCPI) based headline inflation (year-on-year) decelerated significantly below the target to 1.3 per cent in September 2023 driven by declines in both food and non-food inflation, the central bank said.

Sri Lanka increased its interest rates significantly in 2022 to deal with rising inflation, however rates were reduced twice in 2023.

Food items recorded deflation (year-on-year) for the third consecutive month in September 2023, while non-food inflation continued to moderate due to the easing of price pressures across many categories of the CCPI basket. CCPI based core inflation (year-on-year), which reflects underlying demand pressures in the economy, also moderated further in September 2023, reinforcing the disinflation process.

However, this disinflation process is expected to turnaround from September 2023, with the dissipating impact of the favourable base, and converge towards the targeted level of inflation, the central bank said.

Nevertheless, if the planned upward adjustments to administratively determined prices and tariffs, including electricity, as well as any tax measures are implemented by the Government, a short-lived upward movement in headline inflation beyond the target is likely in the near term. Headline inflation is expected to stabilise at the target rate of 5 per cent over the medium term as reflected by the latest projections of the Central Bank.



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Prime Minister of Sri Lanka holds a bilateral meeting with Minister for Education and Skills Development of Bhutan

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On the sidelines of the inaugural Global Conscious Food Systems Summit 2026, being held in Bhutan from 31 August to 4 September 2026, Prime Minister of Sri Lanka, Dr. Harini Amarasuriya, in her capacity as Minister of Education, Higher Education and Vocational Education, held a productive bilateral meeting with Yeezang De Thapa, Minister for Education and Skills Development of Bhutan, on 03 September 2026.

The discussions focused on further strengthening and expanding Sri Lanka-Bhutan cooperation in the education sector, with particular emphasis on developing mutually beneficial initiatives through enhanced Government-to-Government engagement.

Both sides underscored the importance of deepening institutional cooperation and exploring new avenues for collaboration in education, higher education and vocational training, with a view to creating greater opportunities for students, educators and academic institutions of both countries.

During the meeting, both sides agreed to initiate discussions towards the finalization and signing of a Memorandum of Understanding (MoU) on cooperation in the fields of education and vocational training. It was also agreed that the implementation of the MoU could be facilitated through the establishment of a Joint Working Group, headed at the Secretary level, with meetings to be convened annually to review progress, identify new areas of cooperation, and facilitate the effective implementation of agreed activities.

The major areas of cooperation discussed included enhancing collaboration among universities and academic institutions, promoting academic and faculty exchanges, joint research and university programmes, strengthening training and capacity-building opportunities for educators and teachers, and sharing expertise and best practices in the education and vocational training sectors.

The two sides also discussed strengthening child protection and safeguarding mechanisms, promoting ethical values among students, and addressing violence against children while ensuring their safety, protection, well-being and access to quality education.

Opportunities for Bhutanese students to pursue undergraduate studies at universities in Sri Lanka were also discussed, with particular emphasis on Dentistry, Medicine (MBBS), and allied health disciplines such as Physiotherapy. The discussions further covered opportunities for postgraduate studies in medical and health sciences at Sri Lankan universities, as well as enhanced collaboration among universities and other academic institutions of the two countries.

The meeting provided a valuable opportunity for Sri Lanka and Bhutan to advance cooperation in education and vocational training and explore new avenues for long-term collaboration for the mutual benefit of students, educators and academic institutions of both countries.

(Prime Minister’s Media Division)

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Prime Minister Meets His Majesty the King of Bhutan

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Prime Minister Dr. Harini Amarasuriya had an audience with His Majesty King Jigme Khesar Namgyel Wangchuck at the Tashichhodzong in Thimphu on September 02, during her official visit to the Kingdom of Bhutan.

The cordial discussion focused on Bhutan’s future development priorities and opportunities for cooperation between the two countries.

His Majesty expressed Bhutan’s interest in drawing on Sri Lanka’s experiences and expertise in areas relevant to its development plans. The discussion also focused on promoting investment between the two countries, including the possibility of establishing an investment zone in Bhutan.

The two sides also exchanged views on demographic challenges facing Bhutan, including the increasing migration of young people and its impact on the country’s population and future workforce.

The meeting highlighted the importance of strengthening bilateral cooperation and sharing experiences and best practices in support of the sustainable development of both countries.

(Prime Minister’s Media Division)

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SLPP MP Namal Rajapaksa arrested by CIABOC

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(File pic)

Sri Lanka Podujana Peramuna (SLPP)  Member of Parliament Namal Rajapaksa has been arrested by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).

Namal Rajapaksa had been  summoned by CIABOC  to provide a statement in connection with investigations into the controversial Airbus deal. He was subsequently arrested by CIABOC after recording his statement for over 5 hours.

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