The Central Bank says sooner the oil price adjustment is made the better for the Sri Lankan economy, which has become increasingly open in recent years.
Though there were signs that the immediate highs were easing, all indications pointed towards generally high crude prices for the foreseeable future.
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rn"Whatever the market, whenever the market prices change, and adjustment is needed in the economy, you should not postpone it," Central Banks Deputy Governor W A Wijewardene said. "A country like Sri Lanka which has to import all its oil requirement from outside will have to make its own adjustments.
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The markets always expect the economies make this adjustment.
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rnWijewardene said a fuel price hike would only create a one-time spike in inflation and the Central Bank, which left interest rates unchanged was conducting its monetary policy to contain any permanent rises in inflation.rn
rnCentral Banks Assistant to the Governor, Dr. A Karunasena said the combined effect of the drought and oil pric