ECONOMYNEXT – A Sri Lankan bakery cartel raised the price of bread by 10 rupees after a wheat flour oligopoly raised prices while a restaurant association said all ready meals would also increase by 5, 0 rupees as of today as the country reaps the results of record money printing.
“Yesterday the price of a kilogram of wheat flour increased by Rs 18.50 per kilogram,” All Ceylon Bakery Association president NK Jayewardene told reporters after calling a press conference.
âThis is an unprecedented increase. Usually the prices increase by 8-10 rupees. About a month ago, wheat flour increased by 10 rupees. So, in recent days, wheat flour has increased by 28 rupees. Apart from water, all inputs to the baking industry have increased.
The All Island Restaurant Owners Association Asela Sampath said there was a shortage of wheat flour in the market.
A bag of flour will increase by 875 rupees.
âParata, rolls, egg-roti will increase by 5.00 rupees,â Sampath said. “Kottu-roti will increase by 10 rupees.”
Having failed to learn from the shortages observed with the price controls on milk and gas, Ranjith Vithanage, the group’s leader calling himself the National Movement for the Protection of Consumers, called for more price controls.
Vegetable prices in Sri Lanka, which have soared amid the heavy rains, have started to decline. In Sri Lanka, vegetable prices usually increase in November and December.
Sri Lanka’s official inflation index exceeded 8.0% in October, the highest since 2017, after two years of money printing that began around September 2014.
Sri Lanka has printed record volumes of silver over two years, claiming it does not cause inflation.
Supporters of money printing have pointed to the poor policies of reserve currency central banks like the Fed and the European Central Bank to justify printing a bank issuing fixed exchange rate notes.
But reserve currency central banks have now triggered an aggregate demand bubble that sparks inflation around the world and money printing in Sri Lanka has led to a currency collapse that amplifies the effect via commodities. exported and imported.
Sri Lanka’s reserve currency increased 38% between December 2019 (932 billion rupees) and September 2021 (1.296 billion rupees).
Sri Lanka printed 934 billion rupees from December 2019 to September 2021, increasing the monetary reserve by 30% to 1,296 billion rupees, from 932 billion rupees.
The rest of the printed currency had created a deficit in the balance of payments, as they were exchanged for foreign exchange reserves to maintain a fixed exchange rate. Due to partial convertibility, the rupee had fallen to 203 against 182 for the US dollar and currency shortages persist.
Currency shortages linked to money printing have also reduced some imports, which is also pushing up prices.
Vehicle prices have also increased. Even without import controls, used car prices rose in the United States after money printing. (Colombo / November 28/2021)