Sri Lanka Adjusts Monetary Policy Amidst Energy Crisis Linked to Iran Conflict

Sri Lanka has adjusted its monetary policy by increasing the policy interest rate by 100 basis points to 8.75 percent, the largest hike in three years, to combat rising inflation and a weakening currency. The Central Bank of Sri Lanka cited increased oil prices and pressure on foreign currency supply, exacerbated by the US-Iran conflict, as key reasons. Governor Nandalal Veerasinghe stated the hike is necessary for economic stability, despite analysts expecting a smaller increase.