By Hiran H.Senewiratne
Sri Lanka’s inflation is expected to come down to the 7 percent level in July 2023, which at one- time shot up very high, Central Bank Governor Dr. Nandalal Weerasinghe said.
“Headline inflation is expected to decline further and stabilize around the mid-single-digit level. In July this month, we expect inflation to return to a single-digit level, about 7 percent, Dr. Weerasinghe said at the 5th Monetary Policy Review Meeting held at Central Bank head office in Colombo yesterday.
Dr. Weerasinghe added: ‘While disinflation continues, core inflation for the month of June was reported at 9.8%, which, for the first time in a few years was a figure below 10 percent.
“Disinflation has been supported by all major categories, including food and energy inflation.
“Sri Lanka’s headline, core, food and non-food inflation was reported at 69.8%, 50.2%, 94.9% and 57.6 percent , respectively, in September 2022, while in June 2023 they were 12.0 percent , 9.8 percent , 4.1 percent and 16.2 percent , in that order.
“Disinflation has occurred faster than initially expected over the last three months, mainly due to the falling food and energy inflation.
“As per the revised quarterly projection, inflation is expected to return to mid-single-digit levels in the medium term.
“Ongoing disinflation will be supported by several other factors, including the lagged impact of tight monetary and fiscal policies, the expected softening of energy and food prices and their spillover effects, the possible re-pricing of goods and services in light of the exchange rate appreciation and a favourable statistical base effect.
“All necessary regulatory action will be taken in the event banks fail to pass on the benefits of the interest rate reductions to the public.”
Earlier, the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank were reduced by 200 basis points (bps) to 11.00 percent and 12.00 percent, respectively.
By Hiran H.Senewiratne
Sri Lanka’s inflation is expected to come down to the 7 percent level in July 2023, which at one- time shot up very high, Central Bank Governor Dr. Nandalal Weerasinghe said.
“Headline inflation is expected to decline further and stabilize around the mid-single-digit level. In July this month, we expect inflation to return to a single-digit level, about 7 percent, Dr. Weerasinghe said at the 5th Monetary Policy Review Meeting held at Central Bank head office in Colombo yesterday.
Dr. Weerasinghe added: ‘While disinflation continues, core inflation for the month of June was reported at 9.8%, which, for the first time in a few years was a figure below 10 percent.
“Disinflation has been supported by all major categories, including food and energy inflation.
“Sri Lanka’s headline, core, food and non-food inflation was reported at 69.8%, 50.2%, 94.9% and 57.6 percent , respectively, in September 2022, while in June 2023 they were 12.0 percent , 9.8 percent , 4.1 percent and 16.2 percent , in that order.
“Disinflation has occurred faster than initially expected over the last three months, mainly due to the falling food and energy inflation.
“As per the revised quarterly projection, inflation is expected to return to mid-single-digit levels in the medium term.
“Ongoing disinflation will be supported by several other factors, including the lagged impact of tight monetary and fiscal policies, the expected softening of energy and food prices and their spillover effects, the possible re-pricing of goods and services in light of the exchange rate appreciation and a favourable statistical base effect.
“All necessary regulatory action will be taken in the event banks fail to pass on the benefits of the interest rate reductions to the public.”
Earlier, the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank were reduced by 200 basis points (bps) to 11.00 percent and 12.00 percent, respectively.