What is Inflation Targeting?

“Given that Sri Lanka is a twin deficit country, in terms of budget deficit and current account deficit, the chances that Sri Lanka attracting new money at this juncture is very minimal indeed. By increasing interest rates, we will not be able to attract new money or keep the money…

The Rate of Exchange, Capital Flight, and the Central Bank

The Central Bank (CBSL) exists for the sole purpose of price stability. It’s controls on the financial system and monetary policy exist to maintain price stability. As put forth many times by the Governor, the failing of the CBSL to control inflation is a fireable offence. In this light the…