Sri Lanka inflation rise to 4.0-pct

ECONOMYNEXT – Sri Lanka’s consumer price inflation rose to 4.0 percent in the 12 months to February 2019, from 3.7 percent in January amid liquidity shortages in the credit system and a steep fall in the currency in the preceding six months.

The Colombo Consumer Price Index fell 0.5 percent to 126.8 points during the month of February 2019, after spiking 0.9 percent in January, data from the state information office showed.

The food sub-index fell 2.1 percent during the month, while the non-food index rose 0.2 percent.

Sri Lanka’s rupee fell from around 153 to the US dollar to 180 levels through two runs on the Central Bank triggered by liquidity spikes in 2019 in the course of operating an unstable soft-pegged exchange rate regim.

The banking system was also hit by liquidity shortages due to the operation of a soft-pegged exchange rate regime, which can contain demand, but the currency also fell. (Colombo/Mar02/2019-SB)

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