Tuesday June 18, 2019

Sri Lanka's national inflation slows in August to 2.5-pct

Sep 22, 2018 07:01 AM GMT+0530 | 0 Comment(s)

ECONOMYNEXT - Sri Lanka's nationwide inflation slowed to 2.5 percent in the 12-months to August 2018 from 3.4 percent a month earlier, the state statistics office showed.

Consumer Prices during the month fell 0.9 percent to with the National Consumer Price Index falling from 126.6 points to 125.4 percent.

Sri Lanka stated operating a price formula for fuel from May, market pricing petrol and diesel.
Market pricing fuel tends to help reduce demand for non-oil goods, keeping both consumer prices and the imports in balance.

Sri Lanka's rupee however has come under pressure despite market pricing oil, due to excess liquidity generated by the central bank and inconsistent policy on two occasions in 2018.

The rupee is now under pressure in an episode compounded by a liquidity shortage coinciding with the maturity of a legacy swap.

Since December 2014 the National Consumer Price Index has risen 17.82 percent and the so-called core inflation which the central bank claims to be able to control has risen 18.36 percent.

The rupee has inflated 23.2 percent against the US dollar in the same period. The US dollar itself can go up and down changing the prices of traded commodities. The rupee is soft-pegged to the US dollar. (Colombo/Sept22/2018)


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