Eleven out of 15 economists and analysts polled by Reuters said they expect rates to remain unchanged as the Central Bank of Sri Lanka (CBSL) waits for the effects of its earlier hikes to filter through into the economy and for inflation to stabilise.

"There is no need for a change. On multiple fronts things are looking better," said Udeeshan Jonas, chief strategist at CAL Group. "Inflation is changing course, economic activity is better and currency pressure is easing off."

Inflation in Sri Lanka hit 60.8% year on year in July and food costs expanded by a searing 90.9%, according to government data.

Among other issues, a steep increase in crude prices turbo-charged the country's worst financial crisis in seven decades as the island of 22 million people was caught in a severe dollar shortage that has left it struggling to pay for essential imports including fuel, food and medicine.

The CBSL has raised rates by a record 950 basis points so far this year to battle high inflation which was adding to the country's economic worries.

The standing deposit facility rate and standing lending facility rate stand at 14.50% and 15.50%, respectively.

Economists said the CBSL will also wait to get a sense of the government's fiscal targets when it presents an interim budget to parliament in the first week of September, following the departure of former president Gotabaya Rajapaksa last month amid mass protests.

Sri Lanka is in talks with the International Monetary Fund (IMF) for a possible $3 billion bailout package but has to present a plan to put its unwieldy debt on a sustainable path to secure a four-year programme.

"The main concerns now will be the debt restructuring needed for an IMF program and targets that will be set in the interim budget," CAL Group's Jonas said.

For individual poll forecasts, please see the table below:

Organisation SLDFR on Aug.18 SLFR on Aug. 18

CT CLSA No change No change

Acuity No change No change

Advocata Institute No change No change

Rehana Thowfeek No change No change

CAL Group No change No change

Asia Securites No change No change

First Capital No change No change

Asha Securities No change No change

Capital Economics 17% 18%

NDB Investment Bank No change No change

University of Colombo No change No change

JB Securities 15.50% 16.50%

ICRA Lanka No change No change

Standard Chartered 16.50% 17.50%

Citigroup 17.50% 18.50%

(Reporting by Uditha Jayasinghe; Additional reporting by Vivek Mishra in Bangalore; Editing by Swati Bhat and David Holmes)

By Uditha Jayasinghe