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Central Bank on right track; Treasury caught lying!
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Those of you regular readers might recall my congratulatory message to the Central Bank a couple of months back for standing their ground and tightening monetary policy at long last.
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Central Bank on right track; Treasury caught lying!
Those of you regular readers might recall my congratulatory message to the Central Bank a couple of months back for standing their ground and tightening monetary policy at long last. Stopping the money printing operation, revising upwards the repo and reverse repo rates starting November 2004 and continuing in May and June 2005 along with aggressive open market operations to mop up excess liquidity saw inflation begin to fall on a point-to-point basis starting in December 2004.
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This fall in inflation is actually happening in a rising oil price environment proving that the Sandhanaya Government was only attempting to fool the people by pronouncing the main reason for galloping inflation was the increasing price of oil and not their interfering in the Central Bank operations and forcing it to print money.

If the reason for inflation then was in fact rising oil prices, then inflation today would have been over 25 percent!