Ready’85 Go

Governor of the Swedish Central Bank says Sri Lankas Central Bank is almost ready to go for a fully-fledged inflation targeting exercise.
Sweden has successfully used an inflation target based approach to stabilize its economy.



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rnTypically, a central bank will set a low, but credible target and change interest rates to achieve it, regardless of what the fiscal situation is.rn

rnldblquote Thinks have really been moving in Sri Lanka. Many important steps have been taken and in many you are already running an inflation target regime.

You have a floating rate and you set interest rates according among o t you forecast for inflation.



It is up to the Central Bank to decide when they want to announcement a target. It could be done fairlyrnsoon, dblquote says Lars Heikensten, Governor, Riksbank Sweden runs a welfare state with massive public expenditure, which in turn is supported by the excessively high taxes.





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rnCoupled with a fixed exchange rate this had led to a series of financial crises.rn

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