{
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    "date": "2026-05-27T09:41:20",
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        "rendered": "Sri Lanka: Policy tightening supports Rupee \u2013 Standard Chartered"
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        "rendered": "<div id=\"post-content-section\">\n<p>Standard Chartered economists Saurav Anand and Siddharth Sadasivam note that the Central Bank of Sri Lanka raised policy <a href=\"https:\/\/www.fxstreet.com\/rates-charts\/rates\" data-fxs-autoanchor>rates<\/a> by 100bps to curb inflation, cool credit-driven imports and support the LKR. They expect further hikes in 2026, with inflation staying above target and risks from high Oil prices, external pressures and weather-related energy costs.<\/p>\n<h2>CBSL tightening path and inflation risks<\/h2>\n<p>&#8220;The Central Bank of Sri Lanka (CBSL) raised policy rates by 100bps on 26 May to curb rising inflation, contain still-strong domestic demand (leading to a rise in credit-driven imports) and support the LKR.&#8221;<\/p>\n<p>&#8220;The CBSL statement clearly acknowledged that headline CPI inflation is likely to remain above its 5% target in the period ahead.&#8221;<\/p>\n<p>&#8220;We continue to see the CBSL raising policy rates by a further 50bps in Q3-2026, with risk of another 50bps hike in Q4 if higher crude oil prices add to inflationary pressures and increase depreciation pressure on the LKR.&#8221;<\/p>\n<p>&#8220;We therefore revise our end-2026 policy rate forecast to 9.25% (from 8.75% previously).&#8221;<\/p>\n<p>&#8220;We acknowledge the risk of the CBSL keeping policy rates unchanged in 2026 in case of a quick resolution to the Middle East conflict and if crude oil prices stabilise below USD 90\/bbl in Q3-2026.&#8221;<\/p>\n<p><em>(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)<\/em><\/p>\n<\/div>",
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