Consumer prices still rising rapidly

CCPI based headline inflation (Y-o-Y) increased to 64.3 per cent in August 2022 from 60.8 per cent in July 2022 due to the monthly increases of prices of items in both Food and Non-food categories, according to Weekly Economic Indicators of the Central Bank.Meanwhile, Food inflation (Y-o-Y) and Non-food inflation (Y-o-Y) recorded at 93.7 per cent and 50.2 per cent, respectively, in August 2022. Furthermore, the CCPI measured on an annual average basis, increased to 28.0 per cent in August 2022 from 23.1 per cent in July 2022.

During the period under review (27.08.2022 to 02.09.2022), crude oil prices were largely on a declining trend. At the beginning of the period, prices increased due to fears of potential OPEC+ output cuts and conflict in Libya. However, prices decreased later, owing to fears that global central banks will continue to raise rates to countering inflationary pressures and on concerns of renewed restrictions to curb COVID-19 in China. Overall, during the period under review, Brent and WTI prices decreased by US dollars 8.07 per barrel and US dollars 6.03 per barrel, respectively.

Weekly AWPR for the week ending 02nd September 2022 remains unchanged at 25.76 per cent compared to the previous week.The reserve money decreased compared to the previous week mainly due to decrease in the currency in circulation.The total outstanding market liquidity was a deficit of Rs. 597.298 bn by the end of this week, compared to a deficit of Rs. 614.942 bn by the end of last week.By 02nd September 2022, the All Share Price Index (ASPI) increased by 5.95 per cent to 9,316.45 points and the S&P SL 20 Index increased by 5.09 per cent to 3,009.61 points, compared to the index values of last week.

During the year up to 02nd September 2022, the Sri Lankan rupee depreciated against the US dollar by 44.5 per cent. Given the cross currency exchange rate movements, the Sri Lankan rupee depreciated against the Indian rupee by 40.6 per cent, the Euro by 37.0 per cent, the pound sterling by 35.2 per cent and the Japanese yen by 32.5 per cent during this period.The gross official reserves were provisionally estimated at US dollars 1,817 mn as at end July 2022, the CBSL report stated.