Cabinet approves submission of CBSL report on inflation deviation to Parliament

Wednesday, 1 January 2025 00:30 - - {{hitsCtrl.values.hits}}

The Cabinet of Ministers on Monday approved tabling a report in Parliament detailing the deviation of headline inflation from the target set under the Monetary Policy Framework of the Central Bank of Sri Lanka Act. No. 16 of 2023.

The move comes after the Central Bank failed to meet the set inflation target for two consecutive quarters in 2024.

Under the provisions of Section 26(1) of the Act, the Central Bank is tasked with maintaining quarterly headline inflation, measured by the Colombo Consumer Price Index (CCPI) at 5%.

However, the quarterly averages for the second and third quarters of 2024 registered rates of 1.4% and 0.8% respectively—well below the lower margin of the inflation target.

“As stipulated in the Act, when the inflation rate is missed for two consecutive quarters by a significant margin, the Monetary Board of the Central Bank is required to submit a report to Parliament through the Finance Minister. The report must outline the reasons for the deviation and the steps being taken to address it,” Cabinet Spokesman and Minister Dr. Nalinda Jayatissa explained at the weekly post-Cabinet meeting media briefing yesterday.

The proposal to this effect submitted by President Anura Kumara Dissanayake in his capacity as the Finance, Planning and Economic Development Minister was approved unanimously by the Cabinet of Ministers.