Malaysia’s governor says inflation has peaked in Malaysia

(Reuters) – Malaysia’s central bank governor Zeti Akhtar Aziz said on Tuesday that the country’s rate of inflation has peaked and stabilised, but may still pose a risk if the price or supply of inputs are disrupted.

“There are always risks on the horizon for both because we are such an open economy,” Zeti said.

“And given this ongoing financial crisis if it were to deteriorate beyond current circumstances then yes, it is going to be a risk to our growth.”

The central bank decided to keep its benchmark interest rate unchanged at 3.00 percent at its most recent policy meeting held earlier this month, and said that it expected inflation to remain stable for the rest of this year.

Zeti told reporters at an Islamic financial conference here that the International Islamic Liquidity Management Corporation will issue its first papers within the next six months, with the value of the initial issuance expected to be less than $2 billion.

Meanwhile, two banking groups have been given conditional approvals for Islamic mega bank licenses, ie. Islamic banks with total capital of at least $1 billion. She did not disclose the identity of the banking groups.