Oct 22, 2021

Sri Lanka national inflation 5.5-pct in Sept 2021 Featured

Sri Lanka’s nation-wide inflation was up 5.5 percent over 12-months, with food prices up 10 percent data showed, amid unusual money printing and currency depreciation with a Federal Reserve commodity bubble adding to the woes of the poor.

National Consumer Price Index rose 0.3 percent during the month to 147.5 points.

The 12-month inflation was unchanged from August due to a base effect, with prices having risen 0.8 percent in September 2020.

The food sub-index was up 10 percent over the year and 25 percent over two years.

Sri Lanka’s extraordinarily loose monetary policy began around February 2020 with a central bank profit transfer and rate cuts despite the agency’s reserves falling as a share of domestic reserve money.

Sri Lanka changed the inflation index to reduce the share of foods which has more traded commodities and responds faster to domestic and global money printing.

Critics say the new index mis-directed policy contributing to the severe monetary instability seen since September 2014 which is now driving the country towards sovereign default.