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In morning trade the local unit was at 1.4665 to the US dollar, up from 1.
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4752 on Tuesday.
MAS, the de facto central bank, said inflationary pressures have picked up, with rents and wages increasing amid buoyant domestic economic conditions and rising global oil and food prices.
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Inflation rose to an average 2.
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8 percent in July-August but MAS said about half that increase was attributed to a two-percent rise in the goods and services tax.
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Full-year inflation is now projected to reach between 1.
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5 and 2.0 percent, up from the 0.5-1.5 percent expected when the bank's last twice-yearly policy review in April, it said.
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For next year, headline inflation is seen rising to about 3.5 percent in the first half before easing to between two and three percent for all of 2008, MAS said.
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"Going forward, while the economy is expected to moderate to a more sustainable pace, inflationary pressures stemming from external sources, as well as domestic conditions including a tight labour market and ris