Sri Lanka national inflation at 3.7-pct in Jan 2021

ECONOMYNEXT – Sri Lanka’s nation-wide inflation in the 12-months to January 21 was measured at 3.7 percent, down from 4.6 percent in December, the state statistics office said.

The index climbed 0.6 percent to 142.1 points in January from 141.2 points in December. The index also climbed 1 percent in December and 0.5 percent in November.

In 2015 economy recovered from previous currency collapses the central bank printed money to trigger
a currency crisis saying inflation was low triggering a currency collapse.

In 2018 money was printed to trigger currency crisis saying growth was low (target an output gap).

In 2020 the central bank printed money despite the NCPI showing 7.6 percent inflation to create currency pressure on the dollar soft-peg.

The central bank had been targeting inflation, the output gap and the Real Effective Exchange Rate (keep below 100 points) claiming it was operating a ‘flexible’ exchange rate with ‘flexible’ inflation targeting. (Colombo/Feb23/2021)

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