Today, despite the effort to develop foreign currency (FC) issuances and other businesses out of Malaysia, we have not yet reached a critical mass. To date, FC issuances constitute only 4% of the total outstanding sukuk in Malaysia (March 2023: RM1.3 trillion), with USD being the main currency1. In terms of international players, these past few years have seen more consolidation rather than expansion or growth. Notwithstanding these, the FC or international business should represent a continuous opportunity for market players to develop further, in particular with the continued growth of our own international trade and investment and the foreign exchange liberalisations we have undertaken. Moving forward, while the opportunities of FC business remain available, the MIFC agenda will also give due consideration to strengthening the domestic ringgit market. Inclusion of MGII into international indices such as Markit iBoxx ALBI, Bloomberg Global Aggregate and JPMorgan GBI-EM have already led to improved visibility of Islamic instruments and increased foreign participation. Increased foreign participation in the local market via government issuances and multinational corporations' (MNCs) investment in the Halal industry is also envisaged to increase ringgit market appeal among the investors. Growth of takaful and re-takaful also continues to be a development focus. In the financial sector, Malaysia's takaful industry has continued to grow at a faster rate than conventional insurance. It recorded a compound annual growth rate (CAGR) of 20.6% in the first nine months of 2022 and outperformed conventional insurance's CAGR of 10.8%2.

The committee identified the following immediate development areas: the need for continued collaboration between regulators and the financial market community in promoting and improving the transparency to broaden the investor base of the Malaysian sukuk market; the concept of "anticipatory hedging" was identified to be vital in advancing the Islamic derivatives market in Malaysia and in creating a healthy, liquid market for practitioners' hedging activities; enhancement of ESG data so that capital and funding can be directed towards more sustainable and higher-impact assets; and  2/4  BIS - Central bankers' speeches  Islamic Social Finance (ISF) has a role to play in the Malaysian retail market, potentially through a Cash Waqf Linked Sukuk model. This model can serve as a guide for similar social financing models for IFIs to emulate in the Malaysian market. Looking beyond the financial market, there will be a higher platform that will steer the MIFC agenda. With the growing maturity of the Islamic financial sector in Malaysia, Bank Negara Malaysia also believes that the industry is now well positioned to drive the broader MIFC agenda. The MIFC Leadership Council, a joint initiative of Bank Negara Malaysia and the Securities Commission Malaysia will provide thought leadership, and drive strategy formulation and implementation to enhance Malaysia's position as an international gateway for Islamic finance. It is envisioned that the Council will also evolve into a fully industry-led structure that will be better able to respond to - and capitalise on - global opportunities in Islamic finance.