Sri Lanka inflation hits 64.3 percent in August on costlier fuel

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Sri Lanka’s headline inflation climbed to a fresh record in August, although the spike is unlikely to force the central bank to resume tightening interest-rates just yet.

Consumer prices in the capital Colombo rose 64.3 percent from a year ago, versus 60.8 percent a month earlier, the statistics department said in a statement Wednesday. That compares with the median 68.8 percent gain seen in a Bloomberg survey.

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Transport costs rose 148.6 percent, while food prices increased 93.7 percent, the data showed.

While Sri Lanka’s consumer prices have accelerated for 11 straight months amid an unprecedented economic crisis characterized by shortage of food, fuel and medicines, central bank Governor Nandalal Weerasinghe expects price gains to start moderating as he sees demand contracting more-than-expected and supply conditions easing.

The monetary authority last month paused raising interest rates after delivering 950 basis points of hikes this year to tame Asia’s fastest inflation.

On Tuesday, President Ranil Wickremesinghe raised taxes and announced reforms to clinch a bailout from the International Monetary Fund.

The island nation reached a preliminary agreement with the lender for an emergency loan, Reuters earlier reported.

The Washington-based fund will hold a press briefing on the talks in Colombo on Thursday.

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