Reuters – Sri Lanka’s retail inflation accelerated to a near decade-high in November, pushed up by surging food prices, government data showed on Tuesday, strengthening views that the central bank could hike interest rates soon.
The Colombo Consumer Price index (CCPI) rose to 9.9% year-on-year in November, its highest since July 2012, and well above the Central Bank of Sri Lanka’s 4%-6% target range.
October inflation recorded at 7.6% was the highest in 47-months.
Inflation was largely driven by food prices that escalated to 17.5% in November from 12.8% in October. The jump in prices has been attributed to the Sri Lankan government’s controversial policy decision to ban chemical fertilizer in April 2021.
Sri Lanka’s central bank held interest rates steady on Thursday as it sought to support a nascent economic recovery, saying a recent acceleration in inflation was transitory, driven by supply chain disruptions and surging global commodity prices.
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