Recent developments and outlook. Higher fuel prices and global financial volatility generated strong balance-of-payment pressures in 2018, which were exacerbated by a political crisis late in the year. The Central Bank of Sri Lanka (CBSL) maintained a tight monetary policy stance, intervening in the FX market and allowing for greater exchange rate flexibility in response to rising pressures. Growth slowed to 3.2 percent in 2018, but is expected to recover gradually to 5 percent over the medium-term.
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