Inflation to fall further in 2007: Zeti
Malaysiakini
Oct  5, 2006
Muda Mohd Noor

Malaysian inflation is expected to edge below three percent next year if oil prices continue to remain low, said central bank governor Zeti Akhtar Aziz.

Crude oil prices have been falling of late while demand pressures remained contained, Zeti was cited as saying by the Bernama news agency.

Inflation slowed sharply in August to a 3.3 percent year-on-year rate from 4.1 percent in July, according to official data released last month.

The moderation in the consumer price index was in line with projections by the central bank for the second half of the year.

Inflation soared to 4.8 percent in March, the highest level in six years, after the government introduced steep hikes in fuel prices in February.

Asked whether a stronger ringgit would be used as a measure to counter inflationary pressures, Zeti said the central bank had a number of instruments which it could use for the purpose. She did not elaborate.

Inflation eased back to 4.6 percent in April and to 3.9 percent in May and held steady at the same level in June.

Malaysia's central bank in August kept its benchmark interest rate unchanged at 3.5 percent for a third straight meeting, citing the easing in inflation.

For the eight months to August, inflation averaged 3.8 percent compared to the same period last year.