Malaysia c.bank chief sees stable policy environment

Thu Jun 5, 2008

KUALA LUMPUR, June 5 (Reuters) - Malaysia's central bank governor said on Thursday the authority can maintain a stable policy environment until price pressures moderate.

The governor, Zeti Akhtar Aziz, made her comments in a speech a day after the government announced an overhaul of its energy price system that the prime minister said could drive inflation as high as 5 percent this year, a 10-year high.

The central bank governor said she expects inflation to hit 5 percent in June and average 4.2 percent in 2008, up from the previous forecast of 2.5-3.0 percent forecast. (Reporting by Faisal Aziz; Editing by Neil Fullick)