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Sri Lanka inflation picks up to 5.4 percent in October

ECONOMYNEXT – Sri Lanka’s inflation in the capital Colombo in the 12-month to October 2019 rose to 5.4 percent in September 2019, from 5 percent in September, data from the state statistics office said.

The Colombo Consumer Price Index grew 0.2 percent in the 30 days of October to 131.3 points, from 131.1 points a month earlier.

Food inflation accelerated 6.8 percent in the 12-months to October from 3 percent in September. Food prices in October was 1.6 percent higher than September.

The 12-month non-food inflation for October was 4.8 percent slowing down from 5.7 percent in September. Non-food prices fell 0.4 percent in October from a month earlier.

The rupee marginally depreciated to 181.94 against the US dollar in October.

Sri Lanka’s rupee collapsed in 2018 from 153 to 182 to the US dollar with monetary instability generated by a ‘flexible exchange rate’, or a highly unstable peg, which was worsened by a political crisis in October 2018.

Critics have noted that both money (liquidity management, rates) and exchange (convertibility undertakings) are skewed against the rupee.

In early October, the central bank let overnight money market liquidity rise up to 30 billion rupees but has since kept around 20 billion rupees. (Colombo/Nov01/2019)

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