Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.

Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post
Market Place

Add an ad

View all ads

Latest topics

» 8 Finance companaies to be closed very soon
by samaritan Today at 6:26 pm

» Copreus (Pvt) Ltd - Need some Information
by jake94 Today at 5:15 pm

» Sri Lanka’s largest pension fund EPF return to Colombo Stocks
by samaritan Today at 4:04 pm

» Why AAIC Should trade above RS.50/-
by Teller Today at 10:36 am

» Head and Shoulders Top
by freeforexsignals2020 Today at 8:49 am

» UNION BANK (UBC) to be takeover by Union bank of india
by aklt Today at 1:20 am

by wisdom79 Yesterday at 7:42 pm

» Pakistan’s trade with Sri Lanka comes to a halt
by soileconomy Yesterday at 7:35 pm

» Daily Stock Market Update
by Teller Yesterday at 7:18 pm

» Market will test 4700
by karuna2 Yesterday at 12:25 pm

» Keep eye on Politics
by samaritan Yesterday at 11:49 am

» CSE from Dawn of Peace to Rebirth of Terrorism
by Yahapalanaya Yesterday at 9:59 am

» EAST Steady at 18
by mark Yesterday at 9:25 am

» New Support Level 5300
by hammurabi Thu May 23, 2019 8:47 pm

» LIOC upward curve
by karuna2 Thu May 23, 2019 5:57 pm

» SEC yet to publish its 2017 Annual Report
by Teller Thu May 23, 2019 5:10 pm

» HNB Assurance March net down 83-pct
by Teller Thu May 23, 2019 1:18 pm

» PABC net down 13-pct in March; loans contract
by Teller Thu May 23, 2019 1:15 pm

» Indian stocks jumped to record highs
by Teller Thu May 23, 2019 1:13 pm

» modi wins-India to no1 in the world
by Teller Thu May 23, 2019 1:07 pm

» Hayleys revenue up 34% YoY to Rs 219 bn in FY 18/19
by Teller Thu May 23, 2019 1:02 pm

» undervalued stock
by Teller Thu May 23, 2019 1:00 pm

» CIND , 10% guaranteed return
by Teller Thu May 23, 2019 12:57 pm

by Agape Thu May 23, 2019 8:52 am

» Reputation???
by Uaecoindubai Wed May 22, 2019 7:12 pm

by lokka1 Wed May 22, 2019 12:55 pm

» Sri Lanka’s Top 10 Imports
by Gajaya Wed May 22, 2019 11:16 am

» Top 10 Small Scale Business ideas & Opportunities in Sri Lanka 2019
by Gajaya Wed May 22, 2019 11:15 am

» when bank lending rates put down ?
by nuwanmja Wed May 22, 2019 11:01 am

» Sri Lanka's EPF enters stock market with blood in the streets
by God Father Tue May 21, 2019 8:21 pm

» Sri Lanka caught in the big power conflicts
by God Father Tue May 21, 2019 8:16 pm

» High Profile Selling at EAST
by Uaecoindubai Tue May 21, 2019 4:43 pm

» A Trader’s Guide to FIX Engine
by Brenda John Tue May 21, 2019 11:24 am

» Reasons for market to crash
by Uaecoindubai Tue May 21, 2019 10:08 am

» ගෙවුම් ශේෂය, වාහන බලපත් හා ඩොලරයේ මිල
by ChooBoy Mon May 20, 2019 5:59 pm

» Terrorism and its Impact on the Sri Lankan Economy
by ChooBoy Mon May 20, 2019 5:41 pm

» Sri Lanka Equity Market Place
by Sstar Mon May 20, 2019 4:36 pm

» Sri Lanka Equity Market Talk
by Sstar Mon May 20, 2019 12:23 pm

» Sri Lanka Equity Market Help
by Sstar Mon May 20, 2019 12:18 pm

by stockback Sun May 19, 2019 5:20 pm

» Look PAP Amazing company
by Uaecoindubai Sun May 19, 2019 5:13 pm

» Sri Lanka Equity Market Place
by Uaecoindubai Sun May 19, 2019 5:13 pm

by Ahcha Sun May 19, 2019 4:40 pm

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market & Forum Help » Stock Market News » Sri Lanka August inflation seen near record high on drought, rupee

Sri Lanka August inflation seen near record high on drought, rupee

Go down  Message [Page 1 of 1]


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Aug 30, 2012 (LBT) - Sri Lanka's annual inflation rate may have accelerated to near record high of 10.2 percent year-on-year in August as an extended drought pushed up food prices and as a weaker rupee aggravated import bills. The sharp dip in the rupee currency along with higher foodprices drove annual inflation in the $59 billion economy to a 42-month high of 9.8 percent last month.

The rupee has depreciated 16.8 percent since November, making imported inflation a serious threat. The country imports most essential food commodities as well as fuel. Consumer goods accounted for 20 percent of last year's total $20 billion import bill. "We haven't seen an improvement in (food) supply due to the continued drought," one analyst said on condition of anonymity. "The import prices are yet to factored in, though rupee has been more or less flat (in August)."

Food accounts for more than 40 percent of the basket of items used to compile inflation figures. The government has reduced import taxes of selected essential goods since last month and the central bank has said supply shocks will taper off with expected monsoon rains next month.

Central Bank Governor Ajith Nivard Cabraal told Reuters last week that annual inflation in August is unlikely to hit double digits because of steps that have been taken by the government. The International Monetary Fund in its latest staff assessment report ( has said that the current monetary policy stance is appropriate, and a tightening bias should be maintained in the near term until further evidence of diminishing inflation pressures and credit demand emerges.

The central bank in August kept its key policy rates unchanged after raising them twice since February to two-year highs, saying a spike in inflation was due to adverse weather conditions and the resulting disruptions to domestic food supplies.


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Aug 30, 2012 (LBO) - Consumer prices in Sri Lanka's capital Colombo rose 9.5 percent in August 2012, easing slightly from 9.8 percent in July, with the index falling in absolute terms in the month, state statistics office said.

The Colombo Consumer Price Index fell 0.6 percent during the month with the food and non-alcoholic beverages components in the index falling 1.1 percent.
Sri Lanka's inflation accelerated from low single digits after the island's soft-pegged Central Bank, sterilized foreign exchange sales with printed money, worsened a credit bubble and made the rupee fall nearly 18 percent over the past year.

However bank credit is now easing. Past experience has shown that inflation eases as credit slows or contracts following a balance of payments crisis, especially if the exchange rate also strengthens.

Sri Lanka's exchange rate however has not strengthened despite strong capital inflows, because the monetary authority had bought the dollars and created liquidity, preventing a strengthening of the exchange rate.

Analysts have urged the Central Bank to gently sterilize foreign exchange purchases (reversing the cycle that occurs in a balance of payments crisis), and push the exchange rate up to bring inflation down.

The Central Bank has sterilized some of the inflows with the outstanding Treasury bill stock falling by about 20 billion rupees over the past three months indicating that no major demand pressure has been added to the economy by the monetary authority.

Currency depreciation inflates the price of traded goods (imports and exports) and eventually feeds into the non-trade sector.

There are emerging signs that the depreciation is getting entrenched in the price structure of the island and feeding into the non trade sector, which analysts say underlines the urgency for the central bank to strengthen the exchange rate.

Sri Lanka's renewable power producer earlier this week called for higher tariffs to be paid to them by the power utility as capital cost of equipment increased due to currency depreciation.

The central bank has insisted that it can keep inflation below 10 percent by the end of the year.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum