The National Consumer Price Index measured the price movements and showed that the national prices for food and non-food items have eased in August.
According to the NCPI, the price movements rose by 6.7% in August compared to a year ago, while a rise of 6.8% was recorded in July. The inflation resulted from pandemic-infused supply disruptions, sharp Sri Lankan rupee depreciation, and the control of imports and local prices. Some analysts argue that the record amount of liquidity pumped by the Central Bank and the failed auction of T-bills and bonds also contributed to the inflation.
While the Central Bank has adamantly denied this a reason for the inflation, it has increased its key interest rates. This has been done as a preemptive measure against a scenario where higher global prices remain prolonged.
Food prices which increased by 11.1% in the 12 months to August, saw the overall ascent in prices decrease by 0.3%. Non-food prices eased compared to a year ago and a month earlier as the government consented to increase gas prices, thereby restoring supplies. As a result, the cost of non-food items, which rose by 3% a year ago, decreased by 3.2% in July.
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