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CBSL reaffirms commitment to economic recovery

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Dr. Chandranath Amarasekera

By Ifham Nizam

The Central Bank of Sri Lanka (CBSL) has reaffirmed its commitment to stabilizing inflation and supporting economic recovery through a carefully calibrated monetary policy stance. The February 2025 Monetary Policy Report (MPR) outlines key trends in inflation, interest rates and economic growth, offering insights into the nation’s financial future.

To enhance awareness on the report, the Bank hosted two discussions chaired by Assistant Governor Dr. Chandranath Amarasekere, with expert insights from the Director of the Economic Research Department, Directors of the Monetary Policy Committee and technical teams of the Economic Research Department.

The CBSL maintained its accommodative monetary policy throughout 2024, with a notable rate cut in November when it introduced a single policy rate mechanism—the Overnight Policy Rate (OPR)—set at 8.00%. This move effectively reduced interest rates by 50 basis points, a decision aimed at spurring economic activity while keeping inflation in check.

The monetary easing strategy aligns with the CBSL’s broader objective of anchoring inflation expectations, enhancing transparency and fostering financial market stability. As of January 2025, the OPR remains at 8.00%, signaling the bank’s confidence in its current approach.

Sri Lanka experienced deflation in the second half of 2024, driven largely by reduced electricity tariffs, lower fuel prices, and declining food costs. Since September 2024, headline inflation has remained in negative territory, reflecting a sharp drop in consumer price levels.

Looking ahead, the CBSL projects inflation to stabilize around 5% over the medium term. However, short-term risks remain. Inflation may temporarily exceed the target between late 2025 and mid-2026 before normalizing.

The report highlights several key risks to inflation:

Upside risks: Rising global food and energy prices, potential currency depreciation and unpredictable fiscal policies could push inflation higher.

Downside risks: Further price reductions in essential goods and energy could extend the deflationary trend.

The Sri Lankan economy is on a recovery path, albeit at a moderate pace. The CBSL acknowledges that the economy is operating below full capacity, with growth dependent on policy measures and external factors.

Key risks to growth include:

Labour shortages due to brain drain

Uncertain global economic conditions

Impact of climate change on agriculture

Conversely, debt restructuring and tourism recovery could provide much-needed economic momentum.

Despite statistical evidence of falling prices, many Sri Lankans do not feel a significant improvement in their cost of living. The report suggests this disconnect stems from:

Past inflation episodes, which have left prices elevated despite recent declines.

Income levels lagging behind inflation trends, reducing purchasing power.

Psychological and behavioral factors, where consumers may not perceive small price reductions as meaningful relief.

The CBSL’s focus remains on managing inflation expectations, ensuring financial stability, and supporting economic growth. While the current outlook suggests a gradual recovery, external shocks and domestic challenges could still pose risks.

As Sri Lanka navigates its economic future, policy consistency, fiscal discipline, and structural reforms will be critical in achieving long-term stability.

With inflation stabilizing and monetary policy remaining accommodative, the CBSL appears confident in its strategy. However, whether these measures translate into real economic relief for the public remains to be seen.



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From import to export – Finch Foods expands international retail presence to Australia

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Finch Foods booth exhibiting at Foodex Japan in Tokyo

Finch Foods – pioneering Sri Lankan FMCG brand – is furthering its international expansion with the launch of its retail presence in Australia. The move marks yet another turning point for the homegrown company, following four international market launches under the Finch Foods brand within the space of just three years, a company news release said on Wednesday.

This milestone entry includes a dedicated e-commerce site, a listing on Amazon AU, and ongoing discussions with major supermarket chains, specialty stores, and distributors. Australian consumers can now access Finch Foods’ extensive portfolio of high-quality signature spices and seasonings, coconut products, gluten-free flours, ayurvedic and herbal products, and natural food colourings that showcase the rich variety and distinctiveness of Sri Lankan ingredients, it said.

“Australia has always been a key market for Finch Foods – one with immense potential to enter, develop, and scale,” says Fawaz Fassi, Founder & Managing Director of Finch Foods. “This expansion reflects the growing global demand for authentic Sri Lankan heritage ingredients, and we are excited to bring our unique offerings to Australian consumers.”

Founded in 2015 as a 100 per cent import-driven company, Finch Foods entered the food industry by becoming the exclusive agent for renowned international brands such as Bragg Live Foods (USA), The Berry Company (UK), Kewpie (Japan/Malaysia), Cornish (UK), Pokka (Singapore), and Nando’s Grocery; bringing superior flavours and ingredients from around the world to Sri Lankan consumers.

However, the global pandemic followed by local economic instability severely tested this business model, and in just a few years since inception, it was time for the company to rethink its operations. In 2022 Finch Foods set its sights outwards by looking inwards; having discovered that there was a wealth of incredible spices, herbs, and ingredients to be found right here in Sri Lanka – robust and nuanced flavours that would surely intrigue culinary tastebuds from around the world.

“As a pioneer in culinary innovation, our vision is to harness the rich and diverse culinary tradition of Sri Lanka while also bridging the growing disconnect between food and its heritage,” Fassi adds. “At Finch Foods, we recognized the need to add unique value to our products—offering new and exciting options for consumers while distinguishing ourselves from more traditional exporters in the market.”

In 2023, Finch Foods celebrated the opening of its first independent store in Havelock City Mall, Colombo, and expanded its international footprint; establishing a retail presence in Hong Kong, the Czech Republic, and Canada, becoming a key supplier to Japan, and securing a partnership with global retail giant Lulu Group in the UAE. This shift to exports has allowed the company to adapt to different market requirements, leveraging its wide product range to remain flexible in catering to diverse consumer needs.

“As Finch Foods continues to expand its distribution network and strengthen its presence in Australia, the company is also poised to to focus on accelerating its global expansion, breaking into new markets, while also further diversifying its product portfolio,” the release concluded.

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The Residencies Kotte by ICC nears completion ahead of schedule

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The Residencies Kotte by ICC is making remarkable progress, moving ahead of schedule towards completion (December 2025). With ICC’s proven track record of on-time delivery and availability running low, this is a rare opportunity to invest in a home that blends modern luxury with a thriving community, said a release.

It said: Now in its final phase, key milestones are being completed at an accelerated pace. From the striking façade to the finishing touches within each apartment, every element is meticulously crafted to meet ICC’s highest standards.

As The Residencies Kotte nears completion, demand has surged. With all two-bedroom apartments already sold out, only a limited number of three-bedroom units remain available. This overwhelming response is a testament to the unmatched value, world-class amenities, and most importantly, the prime location. Nestled in the heart of Kotte, this development offers unparalleled convenience—situated in a highly sought-after neighbourhood that seamlessly blends urban connectivity with the tranquillity of a well-established residential area.

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Dearo Investment partners with Ceylinco General Insurance to enhance customer benefits

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Officials of Dearo Investment and Ceylinco General Insurance exchanging the MoU

Dearo Investment Pvt. Ltd. has signed an MoU with Ceylinco General Insurance to provide an insurance scheme for its customers. Under this agreement, every customer who transacts with Dearo from anywhere in the country will receive insurance coverage. The MoU was officially signed on 26 Feb, 2025. The signing ceremony was attended by key representatives from both organisations. Dearo Investment was represented by Chief Executive Officer and Managing Director Prasanna Sanjeewa and Chief Operating Officer Niranjan Warnasooriya, while Ceylinco General Insurance was represented by General Manager S. Thilakesh, Assistant General Manager V.K. Gunathilaka, Area Sales Manager N.G.C. Gunarathna, and Senior Marketing Executive Keshara Hasun. Dearo Investment has flourished as a trusted name in the financial sector with its highly experienced Board of Directors, including Prabash Gunaratne, Upul Edirisuriya, Tharindu Dhananjaya Samarawickrama, Niranjan Warnasooriya, and Thilini Kalhari Ekanayake.

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