NCPI based headline inflation increased to 70.2 percent in August 2022

NCPI based headline inflation (Y-o-Y) increased to 70.2 per cent in August 2022 from 66.7 per cent in July 2022 due to increases of prices of items in both Food and Non-food categories. Meanwhile, Food inflation (Y-o-Y) and Non-food inflation (Y-o-Y) recorded at 84.6 per cent and 57.1 per cent, respectively, in August 2022.

Furthermore, the NCPI measured on an annual average basis, increased to 31.3 per cent in August 2022 from 25.9 per cent in July 2022 .During the period under review (17.09.2022 to 23.09.2022) crude oil prices were largely on a declining trend. At the beginning of the period, prices declined due to the US Fed rate hike, strengthening of dollar and subdued outlook for global economic growth. However, prices edged upwards slightly towards the end of the week as the market focused on Russian oil supply concerns, rebounding Chinese demand, and as the Bank of England hiked interest rates at a slower pace than expected.

Overall, during the period under review, Brent and WTI prices decreased by US dollars 1.68 per barrel and US dollars 2.22 per barrel, respectively.Weekly AWPR for the week ending 23rd September 2022 increased by 138 bps to 26.89 per cent compared to the previous week.

The reserve money decreased compared to the previous week mainly due to decrease in the deposits held by the commercial banks with the Central Bank and decrease in the currency in circulation.The total outstanding market liquidity was a deficit of Rs. 569.85 bn by the end of this week, compared to a deficit of Rs.556.58 bn by the end of last week.By 23rd September 2022, the All Share Price Index (ASPI) decreased by 0.96 per cent to 9,964.80 points and the S&P SL 20 Index decreased by 1.06 per cent to 3,203.01 points, compared to the index values of last week.

During the year up to 23rd September 2022, the Sri Lankan rupee depreciated against the US dollar by 44.8 per cent. Given the cross currency exchange rate movements, the Sri Lankan rupee depreciated against the Indian rupee by 39.8 per cent, the Euro by 36.4 per cent, the pound sterling by 33.7 per cent and the Japanese yen by 31.8 per cent during this period.

-CBSL