Sri Lanka inflation gathers speed to 6.9-pct in Feb

Feb 26, 2010 (LBO) – Inflation in Sri Lanka’s capital Colombo accelerated to 6.9 percent in February 2010 from a year earlier, up from 6.5 percent January while prices increased 0.2 percent during the month, the government’s statistics office said. Sri Lanka’s Colombo consumer price index (CCPI) has been rising steadily after April 2009 when prices stopped falling, except for a slight dip in August 2009.

The February 2010 inflation was the highest since February 2009 and the fifth consecutive monthly rise in the index.

The seasonal average of the index, which is a lagging indicator over two years, remained steady at 3.1 percent in February compared with January 2010, but down from 3.4 percent in December 2009.

Central Bank governor Nivard Cabraal earlier in the week said initial price information indicated that the price index will remain stable in February.

He told LBO that the monetary authority is concerned about inflation but expects pressure on the monetary system to ease after April following the island’s traditional New Year festival.

This week, the Treasury bill stock held by the Central Bank rose to 43 billion rupees from around 35 billion rupees a week earlier, indicating fresh monetization of debt raising conc