Following the Central Bank of Sri Lanka’s Monetary Policy Board decision to increase the Overnight Policy Rate by 100 basis points, market interest rates have also begun to rise accordingly.
In response to this policy shift, several banks have already started increasing credit card interest rates. Customers have been notified that the annual credit card interest rate will be revised upward from 26% to 28%, effective July 1.
The increase comes at a time when credit card usage in Sri Lanka continues to grow. According to the Central Bank of Sri Lanka, the number of active credit cards reached 2,166,186 by the end of 2025, rising to 2,215,853 by the end of the first quarter of 2026.
Meanwhile, consumer debt levels have also increased significantly. Outstanding credit card balances stood at Rs. 189,706 million as of December 31, 2025, and rose to Rs. 194,105 million by March 31, 2026, indicating a growing reliance on credit despite the upcoming interest rate hike.
Global Growth Outlook Downgraded as Oil Crisis Impacts Economy
Global growth prospects have been downgraded amid the ongoing oil crisis triggered by the US–Iran conflict, according to Fitch Ratings’ latest Global Economic Outlook (GEO).
Fitch has cut its 2026 global growth forecast by 0.2 percentage points to 2.4%, citing the economic pressure from higher oil prices and rising inflation. The agency noted that inflation is squeezing real wages, weakening consumer spending, and increasing business input costs, leading to widespread downward revisions in growth forecasts.
However, the negative impact of the oil shock is being partially offset by stronger-than-expected momentum in AI-driven IT investment, which continues to support global trade and exports, particularly in Asia.
Regional forecasts have also been adjusted. Growth expectations for the US and eurozone have been lowered by 0.3 and 0.4 percentage points respectively, to 1.9% and 0.9%. Emerging markets excluding China are now projected to grow by 3.2%, down 0.2 percentage points, while China’s forecast has been raised to 4.6% due to stronger-than-expected economic data and resilient exports. South Korea’s outlook has also improved, supported by rising global demand for technology products.
Fitch highlighted that the Strait of Hormuz closure, which has lasted 14 weeks, continues to add pressure to global energy markets. The agency has raised its 2026 Brent crude oil price assumption to $87 per barrel from $70.
Despite the shock, Fitch said the current situation is less severe than historical oil crises such as those in the 1970s, due to lower global oil dependency. However, risks remain elevated. In a more severe scenario where oil prices reach $100 per barrel and financial conditions tighten, global growth could slow sharply, with the US, eurozone, and China all facing further declines.
Sri Lanka credit card interest rates are set to increase from July 1
