Sri Lanka, Oct. 5 -- Sri Lanka's Central Bank will aim to hold inflation at 5% for the next three years under a new Monetary Policy Framework Agreement (MPFA) signed by the government and the central bank.

President Anura Kumara Dissanayake, who also serves as Minister of Finance, Planning and Economic Development, and Central Bank Governor Dr. P. Nandalal Weerasinghe signed the agreement on October 1. It was published the same day in Government Gazette Extraordinary No. 2508/28.

The agreement allows an accountability margin of plus or minus two percentage points around the 5% target. Inflation is measured quarterly, as the simple average of the year-on-year changes in the monthly Colombo Consumer Price Index (CCPI) over the three month...