Feb 07, 2011 (LBO) – A large denomination banknote issued by Sri Lanka’s monetary authority is a testament to the recent high inflation created in the country, an economist and opposition lawmaker has said. Sri Lanka’s central bank issued a 5,000 rupee note, more than twice the value of 2,000 rupee, note also issued after the post-2004 inflation bubble in the country when fiscal probity was thrown out in favour of state expansion, deficit spending and money printing.
Harsha de Silva, an economist who is in Sri Lanka’s parliament representing the main opposition United National Party says inflation indicated by an official index was 111.6 points in April 2004.
“By January 2011, the CCPI had climbed to 231.2,” de Silva said in a statement.
“This means that the price level during this period has increased by 107 percent or more than doubled; said another way, the purchasing power of the Rupee has halved.”
De Silva says if one spent 2,415 rupees to buy some goods in 2004, the person will have to to spend 5,000 rupees to buy the same amount.
Sri Lanka issued a 1,000 rupee note in 1980 at a time when the country had the then highest inflation in its history.
The spike coincided w