Sri Lanka’s consumer prices ease in July to 14.7%

July 31, 2006 (LBO) – Sri Lanka’s consumer prices for July eased marginally to 14.7 percent, the Census & Statistics Department said Monday, as a drop in vegetable prices helped offset hikes in rice, bread and jam. Prices of sugar, garlic, tamarind, red onions, eggs, coconuts and most varieties of vegetables, helped inflation ease up to 14.7 percent in July from 17.7 percent in June, the Department said.

On 12 month moving average inflation for July rose to 10.4 percent from 10.1 percent in June.

The twelve month moving average is usually taken as the official inflation figure by the government.

However, prices hikes were noted in rice, bread, rice and curry dishes, milk tea, jam (Marketing Department brands) and most varieties of fresh fish.

As a result the Colombo Consumer Price Index or CCPI slipped to 4672.5 in July over 4730.5 recorded in June.

The marginal decline in headline inflation made analysts wonder if the Central Bank would tighten its policy rates further in August.

Earlier this month, the bank unexpectedly raised key interest rates by a 12.5 basis points, in an attempt to shore up the rupee and curb inflationary pressures.

The central bank’s repurchase rate mov