(Bloomberg) --
Sri Lanka’s inflation accelerated to a six-month high, suggesting the central bank may have less room to keep cutting interest rates.
Consumer prices in the capital, Colombo, rose 2.8
percent in November from a year earlier after gaining 1.4 percent in October, the statistics agency said on its Web site today.
Faster inflation may scuttle the central bank’s plans to boost credit demand and drive the economy’s recovery after the end of the island’s 26-year civil war. Central Bank of Sri Lanka Governor Nivard Cabraal has slashed interest rates to a five- year low to spur spending and make up for slowing exports.
“We expect policy makers to keep rates on hold through 2010 as inflationary pressures mount,” said Samantha Amerasinghe, an economist at Standard Chartered Bank in Colombo.
Consumer prices in the capital, Colombo, rose 2.8
percent in November from a year earlier after gaining 1.4 percent in October, the statistics agency said on its Web site today.Faster inflation may scuttle the central bank’s plans to boost credit demand and drive the economy’s recovery after the end of the island’s 26-year civil war. Central Bank of Sri Lanka Governor Nivard Cabraal has slashed interest rates to a five- year low to spur spending and make up for slowing exports.
“We expect policy makers to keep rates on hold through 2010 as inflationary pressures mount,” said Samantha Amerasinghe, an economist at Standard Chartered Bank in Colombo. 
