Sri Lanka November inflation falls to 16.3-pct

Nov 28, 2008 (LBO) – Consumer inflation in Sri Lanka’s capital Colombo fell to 16.3 percent in November from 20.2 percent in October, while prices fell by an absolute 0.7 percent in the 28 days of the month, the government’s statistics office said. The moving average of the index, which is smoothed over two years and lags point-to-point inflation, also fell to 23.0 percent from 23.4 percent in November.

The index number fell in absolute terms to 205.2 points from 206.6 points in October. It peaked at 207.2 percent.

The subgroup containing electricity and gas fell to 229.6 index points from 234.0 points and transport fell to 266.3 from 274.8 amid falls in bus and power and cooking gas fares.

Sri Lanka is currently importing deflation through its dollar peg amidst a global commodity bubble, but the central bank has been printing tens of billions of rupees in a self-destructive sterilized intervention cycle to maintain its peg since September.

The statutory reserve ratio has also been cut twice released more than 20 billion rupees to the banking system.

The food sub group, which is sensitive to domestic monetary conditions due a non-traded fish and vegetables showed a slight increase to 214.6 percent which analysts say may in