Central Bank charts path to stability and growth in 2025 and beyond
- 5opn1
- January 14, 2025
- Banking and Financial
- Central Bank charts path to stability and growth in 2025 and beyond
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The Central Bank (CB) last week unveiled an ambitious policy agenda: inflation stabilisation, a fostered economy, and financial stability for 2025 and beyond. The CB is envisaging a more forward-looking and data-driven approach to monetary policy formulation through enhancing the macroeconomic modelling setup and alternative frameworks.
Governor Nandalal Weerasinghe indicated the commitment of the institution to inflation stabilisation at 5 per cent within its flexible inflation targeting framework and supported sustainable economic growth in the medium term.
This process encompasses building up a sound research culture within the institution that underpins policy analysis. The implementation of monetary policy under a unified policy interest rate mechanism is proposed to be made effective through the shift to a more market-friendly Open Market Operations system in 2025.
It also aims to further develop the onshore foreign exchange market by introducing a benchmark spot exchange rate that would guide all market participants and the general public. This will further improve transparency and facilitate better management of exchange rate risks.
