Making monetary policy work in Sri Lanka

The Central Bank of Sri Lanka (CBSL) announced in February 2014 that the country maintained single-digit inflation for five consecutive years for the first time since independence. For a country that has historically suffered from both high and volatile rates of inflation, this achievement is no mean feat. The scale of this accomplishment becomes clear when comparing the country’s monetary environment to that of 2008, when annual inflation peaked at 22.6 per cent before settling to single-digit levels from February 2009.