Sri Lanka’s CPC makes Rs88bn profit as rate-mistargeting ends

Sri Lanka’s Ceylon Petroleum Corporation has made an 88.6 billion rupee profit in the first eight months of 2023, partly helped by currency appreciation, a Finance Ministry report said, compared to a loss of 716 billion rupees last year amid a currency collapse.

Currencies collapse when soft-pegged (flexible exchange rate) central banks print money to mis-target short-term interest rate, which are then blamed on ‘budget deficits’.

When currencies are inflated and depreciated by the monetary authority, on various pretexts, SOEs have to engage in never ending price increases.

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