Inflation falls further to a five years low of 0.7%
The rate of inflation, as measured by the point-to-point change in the Colombo Consumers’ Price Index (CCPI) (2002=100), computed by the Department of Census and Statistics, further dropped to 0.7 per cent in September, 2009 from 0.9 per cent in August, 2009. This is the lowest level of inflation recorded since February, 2004. The annual average inflation rate also continued on its decelerating path observed since November,
2008 and declined further to 6.6 per cent compared to 8.5 per cent in the preceding month.
The CCPI increased marginally by 0.2 per cent over the previous month, with the Index moving upward to 208.6 from 208.1 in August, 2009.
The contribution to the monthly increase in the Index arose mainly from the Food and Non alcoholic beverages sub category. The Clothing and footwear category recorded a decrease while the Housing, water, electricity, gas and other fuels, Health, Furnishing, household equipment and routine household maintenance, Education, and Miscellaneous goods and services categories recorded increases during the month.
The Core inflation, on a point-to-point basis, decreased to 5.4 per cent in September, 2009 as compared to 6.4 per cent in August, 2009, and the annual average core inflation declined further to 12.1 per cent in September, 2009 from 13.2 per cent in the previous month.
Sri Lanka meets quantitative targets under IMF program: CB Governor
Sept 28, 2009 (LBO) – Sri Lanka has met the key end-September quantitative targets under an International Monetary Fund program, Central Bank Governor Nivard Cabraal said.
“We have met all the targets under the program,” Cabraal said.
A key target is a ceiling on reserve money or the narrowest supply of money made up of circulating cash and commercial bank deposits at the Central Bank through which final transactions in the economy is passed through.
The IMF program has a reserve money target of 280.37 billion rupees for September 30. Reserve money reached 284.2 billion on September 24, with cash generated by purchases of dollars by the Central Bank.
The Sri Lanka rupee strengthened to 114.45/50 against the greenback briefly in late afternoon trade Friday after a state name that usually represents the monetary authority went off the market, after starting the day at the usual 114.80/83 dealers said.
Dollar purchases by the monetary authority increases reserve money, forcing it to sterilize them by selling Treasury securities in its portfolio.
But the rupee moved back up to the pegged rate of 114.80 before markets closed.
“It was slight aberration and we have put it back,” Cabraal said. “We have met the reserve money target and also the net domestic financing target of the program.”
The net domestic financing ceiling of 305.0 billion rupees in the IMF program is used to monitor budget performance, though nominally a 7.0 percent of gross domestic budget gap is talked about.
Another key quantitative target of foreign reserves was reached months earlier, the Central Bank said.
Sri Lanka rural sector eyed by global BPO service providers
Oct 02, 2009 (LBO) – Sri Lanka’s rural economy can take a slice of India’s 12 billion dollar Business Process Outsourcing (BPO) industry by catering to the bottom of the pyramid customers who look at costs over optimum service, a foreign investor said.
“India does about 12 billion dollars of knowledge base process work; 10 percent of that is a big amount for us,” Raj Amirthanayagam, managing director of Revanalytics Solutions Inc., a Canadian technology company, said.
“They can make 2,000 rupees an hour; that’s what’s paid in other countries for quality processed work.”
India is one of the largest BPO operators in the world, but the boom in the Indian economy has increased operating costs in cities due to higher rent expenses. The ICT penetration rate in rural India remains poor.
Now Indian BPOs are looking at specialized back office services such as accounts, legal, insurance and technology-related work, which generates higher income.
Sri Lanka has great potential in the BPO sector as the government has invested substantially setting up ‘Nenasela’ information technology training centre’s, Amirthanayagam said.
“There is a big demand for jobs in the lower end of the ICT industry.”
Sri Lankan-born Amirthanayagam said opportunities are available for the lower end of the BPO industry such as data entry which has got too expensive to operate in cities.
BPO companies operate from cities due to infrastructure bottlenecks in the rural provinces such as lack of high speed internet lines.
But in rural Sri Lanka IT access has improved after the government opened ‘Naneselas’ ICT kiosks that provide high-speed internet links.
“This is ideal for graduates who don’t want to leave their homes,” Amirthanayagam said.
Sri Lankan students are very talented and if trained and developed can provide BPO services with more value addition, said Sankar Krishnan,
managing director of US-based outsourcing company Adventity, another firm keen to do BPO work in the island.
“We will be teaching skills which will be done better in the rural sector,” Krishnan said. “We will train them to use the systems.”