Money, Credit & Interest Rates
A visual overview of Sri Lanka’s monetary conditions, covering broad money, reserve money, monetary policy rates, private-sector credit and the money multiplier using the latest available Central Bank of Sri Lanka datasets.
Broad money (M2b) continued to expand during the period, increasing from approximately Rs. 15.18 trillion in June 2025 to Rs. 16.92 trillion by June 2026. Reserve money also increased from approximately Rs. 1.66 trillion to Rs. 1.89 trillion over the same period. The expansion in broad money indicates continued growth in liquidity and banking-system deposits, while the increase in reserve money points to a larger underlying monetary base.
The policy rate remained at 7.75% through April 2026 before increasing to 8.75% in May and June. The Standing Deposit Facility Rate and Standing Lending Facility Rate also increased by 100 basis points. The move represents a tightening in monetary conditions after a prolonged period of relatively accommodative rates and coincides with a rise in market Treasury bill yields.
Total private-sector credit reached approximately Rs. 11.21 trillion in June 2026. Industry was the largest broad sector at approximately Rs. 4.08 trillion, followed by services at Rs. 3.47 trillion and personal loans and advances at Rs. 2.67 trillion. Agriculture and fishing accounted for approximately Rs. 1.00 trillion. The distribution shows that the banking system’s credit portfolio remains strongly linked to industry, business services and household finance.
The M2 money multiplier was approximately 8.96 times reserve money in June 2026, compared with approximately 9.14 times in June 2025. The M1 multiplier was approximately 1.25 times in June 2026. The decline in the M2 multiplier over the period indicates that broad-money growth has been accompanied by a somewhat larger expansion in the underlying monetary base. Nevertheless, the banking system continues to generate a substantial multiple of broad money relative to reserve money.