KUALA LUMPUR: Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said the increase in infl ation rate to 1.8% in April was within expectation.

Malaysia’s consumer price index in April rose to 1.8% from a year earlier, as the eff ects of the implementation of the goods and services tax kicked in.

“April’s infl ation of 1.8% was pretty much priced in, [it was lower before] due to the decline in oil and other commodity prices in the beginning of the year,” she told reporters after a luncheon power talk in conjunction with the Asean Small and Medium Enterprise (SME) Showcase and Conference 2015 organised by SME Corp Malaysia yesterday.

“Inflation is expected to be in the range of 2% this year,” she added.

On concerns expressed by the SMEs in obtaining credit, the governor said credit growth in the banking system is still strong.

“We are still having strong credit growth, expanding at a rate of 9%. Th ose [SMEs] that are facing challenging conditions should discuss with their respective banks, and these banks should highlight to them how they can be eligible [for credit],” said Zeti.

This article first appeared in The Edge Financial Daily, on May 28, 2015.