COLOMBO Feb 28 Sri Lanka's consumer price
inflation hit a record high of 6.8 percent in February under a
new index, government data released on Tuesday showed, pushed up
by the impact of a lingering drought and base-year effects.
This could be a cause of concern as the central bank has
said the conduct of monetary policy will be strengthened through
the move towards a flexible inflation targeting (FIT) framework,
The inflation, measured on the Colombo Consumer Price Index
(CCPI), rose to 6.8 percent in February from a year earlier,
accelerating from the previous month's 5.5 percent rise under a
revised base-year and market basket.
Inflation measured on a 12-month moving average basis also
hit an all-time high of 4.6 percent, compared with the previous
month's 4.3 percent.
"The rise is led largely by base effects, while impacts of
drought on food and beverage inflation added further to the
overall increase," said Trisha Peries, an analyst with Frontier
"At present, we are not seeing too much of an impact from
the depreciation (of the rupee) relative to the drought which
continues to dominate the rise in inflation."
Core annual inflation, which excludes fresh food, energy,
transport, rice and coconuts, rose to 7.1 percent in February,
compared with the previous month's 7.0 percent, the index with a
new base year of 2013 showed.
The rupee has fallen over 1 percent this year, resulting in
(Reporting by Shihar Aneez; Editing by Subhranshu Sahu)