Forex

Malaysia's inflation could reach 7 percent in June and July, but the rate should not exceed 5 percent for the whole of 2008, Second Finance Minister Nor Mohamed Yakcop said on Monday.

"Inflation for the months of June and July... will be slightly high, maybe 7 percent or so, or even higher," Nor Mohamed told reporters.

"For the year as a whole it will be contained. My own expectation is not more than 5 percent," he said.

Earlier this month, the central bank said annual inflation probably topped 6.0 percent in June, and some economists predicted it would raise interest rates if inflation did reach that level.

But Nor Mohamed 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," he said.