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Sri Lanka inflation slows to 0.7 percent in September

Sept 30, 2009 (LBO) - Consumer prices in Sri Lanka's capital Colombo rose 0.
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7 percent in September from a year earlier, down from 0.
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9 percent in August, the government's statistics office said.
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The monetary authority, which keeps the rupee pegged to the US dollar, has relaxed policy rates, but has been engaging in steady "quantity tightening" to build up foreign reserves since April.

In the month of September alone prices rose 0.2 percent, against a fall of 0.

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3 percent in August, measured by the Colombo Consumer Price Index (CCPI).

The seasonally adjusted inflation, which is averaged over two years and is a lagging indicator, fell to 6.6 percent in September from 8.5 percent in August.

Sri Lanka's Central Bank has kept monetary policy tight over 2008, and is targeting single digit inflation in 2009.

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