Earnings from exports in November 2021 recorded the highest monthly export value in the history, while marking the sixth consecutive month of above US dollars 1.0 billion of exports. Meanwhile, import expenditure also increased at a higher rate in November 2021. Reflecting the favourable impact of increased exports, the merchandise trade deficit narrowed to US dollars 553 million in November 2021 compared to US dollars 600 million in November 2020. Tourist arrivals continued to gather momentum with a notable increase over the previous month, showing strong signs of revival. A further moderation of workers’ remittances was observed in November 2021. The weighted average spot exchange rate in the interbank market continued to hover around Rs. 202 per US dollar during the month.

Headline inflation, as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100)1, increased to 14.0 per cent in December 2021 from 11.1 per cent in November 2021. Meanwhile, on an annual average basis, the NCPI increased to 7.0 per cent in December 2021 from 6.2 per cent in November 2021.

Inflation was driven by monthly increases of prices of items in both Food and Non-food categories. Subsequently, Food inflation (Y-o-Y) increased to 21.5 per cent in December 2021 from 16.9 per cent in November 2021, while Non-Food inflation (Y-o-Y) also increased to 7.6 per cent in December 2021 from 6.2 per cent in November 2021.