Sri Lankan 2009-end inflation to be 6.0-pct: Statistics office

Sept 15, 2009 (LBO) – Sri Lanka’s year-end consumer inflation measured by a revised Colombo Consumer Price Index is estimated to be 6.0 percent by December, and seasonally adjusted number even lower, the government’s statistics office said.

The United States has reported a negative 2.1 percent inflation for July and hard pegged Hong Kong, which runs a currency board with no money printing powers has reported negative -1.5 percent for July.

“We estimate point to point inflation to be at 6.0 percent at December 2009,” head of the price indices division at Sri Lanka’s statistics office told reporters.

“[Seasonally adjusted] inflation for 2009 will be at 4 percent,” he said.

Sri Lanka’s inflation has fallen to 0.9 percent amid tight monetary policy by the Central Bank as well as a deflationary collapse of the global economy which reduced the inflationary pressures imported through a dollar peg.

But in the past Sri Lanka’s inflation has been consistently higher than the rest of the world, and most other dollar pegged nations.

In general a currency that is tightly pegged to a foreign ‘anchor’ currency and does not print money on its own tends to have broadly the same inflation as the anchor currency.

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