COLOMBO, Oct 23 Reuters Sri Lanka39;s consumer price inflation rate eased to 0.8 yearonyear in September from 2.1 in August, the statistics department said on Monday.

The National Consumer Price Index captures broader retail price inflation and is released with a lag of 21 days every month.

Food prices fell 5.2 in September after declining 5.4 in August, from a year earlier, the Department of Census and Statistics said in a statement.

Prices for nonfood items, however, climbed 5.9 in September after rising 9 yearonyear in August.

Sri Lanka experienced record high inflation after its economy was pummelled by the worst financial crisis in decades.

But since June, its inflation has come down sharply, partly due to the statistical base effect, but also helped by a stronger rupee currency, and improved harvests.

Sri Lanka raised power prices for households by 18 last week but the increase is unlikely to significantly push up inflation, analysts said.

We expect inflation to end the year at about 5. A small increase is expected as the base effect is coming to an end from September but the impact from price adjustments is not expected to be severe, said Dimantha Mathew, head of research at First Capital Research.

Sri Lanka secured a staff level agreement on the first review of its 2.9billion bailout from the International Monetary Fund IMF last Friday but it still needs approval from the global lender39;s Executive Board.

The island needs to finalise debt restructuring…