France sees inflation coming down

"Inflation will fall in coming months," she told reporters, adding that the rate for July will remain high.

In June, French inflation reached 3.6 percent, the highest rate in 17 years. Lagarde said she expects the rate to fall based in comparison to 2007, when prices jumped, and as some commodity prices fall.

European Union statistics show that inflation in the 15-nation euro zone hit 4 percent in June--the highest level since records started 16 years ago. That is double the European Central Bank's inflation target of below or around 2 percent.

ECB President Jean-Claude Trichet says the bank's main aim is to fight inflation, putting him at odds with French President Nicolas Sarkozy, who says the bank should think about economic growth in Europe--and not just inflation.

Earlier this month, the ECB raised its benchmark interest rate from 4 percent to 4.25 percent, but left open where rates will go next. Higher rates fight inflation, but can slow growth too.