ECONOMYNEXT – Sri Lanka’s deputy finance minister has defended the central bank’s 5 percent inflation target, saying it reflects the structural characteristics of a developing economy. “To a developing and open economy like Sri Lanka a 5 percent inflation target is most suited as it faces a greater exposure to external shocks, supply side disruptions, and exchange rate volatility,” Anil Jayantha told parliament. He was responding to a query raised by opposition MP Ravi Karunanayake on why the government chose a 5 percent target over a 2 percent target seen in most nations. The central bank (CBSL) had set a…
Sri Lanka government defends central bank’s 5-pct inflation target
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