Key rates in Sri Lanka cross 14 percent, central bank fears, inflation may reach 70 percent

Key rates in Sri Lanka cross 14 percent

Image Credit source: AFP

Sri Lanka’s central bank has raised key policy rates by one percentage point each to 14.50 percent and 15.50 percent to curb inflation. At the same time, the fear of further increase in inflation rate has also been expressed.

Struggling with rising inflation and severe economic crisis Sri Lanka ,Sri Lanka) has accelerated all the steps necessary to bring the economy back on track. Today the Central Bank of Sri Lanka has raised the inflation rate (inflation) announced a hike in key rates. In fact, the inflation rate in the country has crossed 50 percent. Because of this, the central bank has announced to increase the rates. With the announcement of rates, the central bank expressed apprehensions that there may be a further jump in inflation. Earlier the government had given fuel (Fuel) restrictions were imposed regarding the control of consumption. At the same time, the limit of foreign exchange with the people in the country has also been reduced. Recently, a team from the Reserve Bank of India also reached Sri Lanka to assess the economic situation.

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Sri Lanka’s central bank has raised key policy rates to 14.50 percent and 15.50 percent to curb inflation. Central bank governor Nandlal Veerasinghe said that the local deposit facility rate and fixed loan facility rate charged from commercial banks have been increased by one percentage point each to 14.50 and 15.50 percent respectively. The problems of Sri Lanka’s poor have increased significantly due to the recent surge in the prices of essential commodities. They are facing shortage of essential items like food, fuel, cooking gas and medicines.

Inflation expected to be 70 percent

Due to the shortage of fuel and food items and the deteriorating economic situation, the central bank has expressed fears that the country’s inflation rate may see a further jump. Governor Virasingh said that our priority is to bring inflation down to a reasonable level at the earliest. The sooner that happens, the better. Sri Lanka’s inflation in June has reached close to 55 percent

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Sri Lanka is currently stuck in a serious economic crisis. The country’s inflation rate has touched a record level for the 9th consecutive month. Inflation rate in the month of June has been 54.6 percent. At the same time, this has been the first month when the inflation rate has crossed 50 percent. On the other hand, the Sri Lankan rupee has lost half its value against the dollar so far this year. At the same time, some institutions around the world believe that Sri Lanka’s inflation rate is much higher than the official figures. An economist at Johns Hopkins University believes that Sri Lanka’s inflation rate is actually 128 percent and the country ranks second among the countries with the highest inflation rates in the world. At present, the inflation rate in Zimbabwe is more than 300 percent.