April 30, 2008 (LBO) – Sri Lanka’s central bank has tightened reserve money targets as 12-month inflation hit a new high of 25.0 percent in the capital Colombo on a new index while an older index showed an increase of 29.9 percent in April. The US has increasingly come under fire for firing a global commodity bubble with billions in new money printed to save its collapsing banking system.
The Wall Street Journal said this week that the Federal Reserve chief Ben Bernanke needed to join a central bankers help group, or Central Bankers Anonymous, to kick the printing habit.
If US monetary policy has been on par with Europe, oil would have been trading at 70 dollars a barrel now, the Journal said. The monetary authority said it had been carefully monitoring developments on commodity prices and its impact on ‘core’ inflation, which indicated the need for further measures.
“â€¦the Central Bank has decided to further restrict its quarterly targets for reserve money through a downward revision for the remaining three quarters of 2008,” the Central Bank said.
The monetary authority said in the first quarter the reserve money grew by 11.7 percent to 273 billion rupees against a target 281.5 billion rupees with 14.9 percent growth.