COLOMBO, Sept 30 Sri Lanka's core inflation
picked up slightly in September, data from the Department of
Census and Statistics showed on Friday, despite a rate hike by
the central bank two months ago.
Core annual inflation, which excludes fresh food, energy,
transport, rice and coconuts, rose 4.2 percent, accelerating
from 4.1 percent the previous month. It hit a 38-month high of
6.6 percent in May.
The central bank raised its key monetary policy rates by 50
basis points in July, in a third tightening measure since
December, to curb stubbornly high private sector credit growth.
It will take between 12 and 18 months to see the impact of
the past tightening measures, central bank governor Indrajith
Coomaraswamy said, after holding the policy rates steady in
The rise in core inflation is not alarming, said Shiran
Fernando, an analyst at Colombo-based Frontier Research.
"It has been coming down compared to what it was in May and
annual inflation is also coming down."
The International Monetary Fund (IMF) last week urged the
central bank to stand ready for further tightening if inflation
or credit growth rise.
Annual private sector credit growth in July stood at 28.5
percent, its highest since August 2012, but Coomaraswamy this
week said the central bank expected the credit expansion rate to
slow to 20 percent by the end of 2016.
(Reporting by Shihar Aneez; Editing by Clarence Fernandez)