Background: the Act of 2023 that made Sri Lanka's new inflation target agreement possible

Background

Sri Lanka's fresh inflation target agreement rests on a law passed a few years earlier, so the law is worth knowing on its own. The Central Bank of Sri Lanka Act, No. 16 of 2023 governs the central bank. Section 26 of that Act is the provision under which the government and the bank sign a Monetary Policy Framework Agreement. The agreement must be published in the Government Gazette; the 2026 one appeared in Gazette Extraordinary No. 2508/28. The target is written against quarterly headline inflation measured by the Colombo Consumer Price Index. It is reviewed every three years, or sooner in exceptional circumstances.