Sri Lanka inflation falls for second month to 4.5-pct
ECONOMYNEXT – Sri Lanka’s 12-month inflation fell to 4.5 percent in February 2018, from 5.8 percent in January with the Colombo Consumer Price index falling for the second month, data from the state statistics office said.
The Index fell 0.7 percent in during the month to 121.9 points after falling 0.1 percent in January.
Sri Lanka’s central bank has had tight monetary policy over the past year withdrawing liquidity, instead of printing money, though the currency has weakened, pushing the price of traded goods up.
Sri Lanka’s rupee collapsed in 2015 and also fell in 2016 after a bout of money printing, but Central Bank Governor Indrajit Coomaraswamy had tightened policy and stabilized the economy.
The central bank has said some prices such as rice and coconuts, which rose due to drought will come down later, helping moderate the index.
Rice prices have already started to come down, with harvests from the Maha season coming in. (Colombo/Feb28/2018)