Malaysia expects 7% inflation this month

Kuala Lumpur: Malaysia's inflation could reach seven per cent in June and July, but the rate should not exceed five per cent for whole of 2008, Second Finance Minister Nor Mohammad Yakcop said on Monday.

"Inflation for the months of June and July... will be slightly high, maybe seven per cent or so, or even higher," Nor Mohammad told reporters.

"For the year as a whole it will be contained. My own expectation is not more five per cent," he said.

Earlier this month, the central bank said annual inflation probably topped six per cent in June, and some economists predicted it would raise interest rates if inflation did reach that level.

Interest rates

But Nor Mohammad was non-committal on any change in interest rates.

"The government's policy on interest rates, as we all know, is that it should be accommodative to promote growth. And we leave it at that," the minister said.