Malaysia s interest rate at appropriate level - central bank

KUALA LUMPUR (Thomson Financial) - Malaysia s interest rate is still at the appropriate level and supportive of growth despite rising inflation, central bank governor Zeti Akhtar Aziz said Monday.
The issue of rising prices will "perhaps not be addressed through the central bank s interest rate policy but through other measures, said Zeti.
"The Malaysian interest rate is still at the appropriate level. We brought our interest rate to this level to take into account that inflation was likely to increase. At the same time, we wanted to have the interest rate still supportive of the economy, said Zeti.
Bank Negara, the Malaysian central bank, has kept its overnight policy rate (OPR) at 3.5 percent since April 2006. The central bank will hold its first monetary policy meeting for 2008 tomorrow. It is widely expected to leave the OPR unchanged.
Malaysia s inflation rate has gradually crept up over the past few months as the global commodities boom has sent prices of food and energy soaring.
The inflation rate accelerated to 2.4 percent in December from 2.3 percent in November. The higher inflation rate was partly induced by disruptions in food supplies after severe flooding hit several states last month.
(1 US dollar = 3.24 ringgit)
johnkb.tan@thomson.com
MMMM