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Sri Lanka’s inflation eases to 20.2-pct

Oct 31, 2008 (LBO) – Consumer inflation in Sri Lanka's capital Colombo fell to 20.2 percent in the 12-months to October from 24.3 percent a month ago, the central bank said.

On Thursday the central bank broke its peg with the US dollar and the rupee fell by two rupees, but on Friday it continued to intervene, but has put restrictions on imports. In the 31-days of September inflation fell by 0.3 percent, measured by a revised new index.

The Central Bank in a separate statement said inflation for the 12-months to September was 20.2 percent. Initially the statistics office website said the rate was 20.3 percent.

The easing inflation was shown by a fall in food and telecommunications categories. The controversially revised new index, pro-rates some prices over two months and an entire standard sub-group of items had been dropped on political considerations.

The seasonally adjusted inflation rose to 23.4 percent from 23.2 percent.

Sri Lanka's central bank has kept monetary policy tight in the first half of 2008, by not printing money to finance the government.

In the second half of 2008, a global commodity bubble also burst, helping reduce inflation

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