The Hon. (Dr.) Anil Jayantha – Minister of Labour and Deputy Minister of Finance and Planning

¶ 01 Hon. Speaker, the Question by Hon. Ravi Karunanayake raises several complex matters, particularly intertwined with financial stability. We must obtain technical information from multiple institutions, including departments of the Central Bank. I expect to provide a detailed Answer later. However, I will set out a few basic points.

¶ 02 Financial stability includes several key variables: inflation, interest rates, and the exchange rate. At present, the Government has been able to restore stability and avoid unnecessary volatility. We are operating under a flexible inflation targeting framework. When we assumed office under the agreed framework, the Ministry of Finance and the Central Bank concurred on the target.

¶ 03 Regarding the specific 5 per cent target, whether it is right, wrong, still necessary or not, will be assessed at the next review. I will obtain those details from the Central Bank. That review concludes in March 2026. We are currently operating under the 5 per cent target. Inflation has been arrested; we have not yet “run past” the target, nor have we fully reached it. In a fragile environment, if inflation is allowed to run up unnecessarily, economic recovery will be hindered. I will present a comprehensive, clear Answer in due course.