There is also positive response from the local and foreign financial institutions to establish International Islamic Bank, International Takaful Operator, as well as International Currency Business Unit to undertake international currency business in Islamic finance in Malaysia. To date, eight financial institutions have been granted approval to set up such International Currency Business Units in Malaysia. Commercial banks and investment banks licensed under the Banking and Financial Institutions Act 1989 (BAFIA) are allowed to establish International Currency Business Units to carry out Islamic banking business under their existing entities. BIS Review 88/2007  3  To enhance the delivery system to facilitate their establishment, an "executive green lane" has been accorded to expedite applications by expatriates for long-term employment passes with multiple entry visas. In addition, the Foreign Investment Committee rules are also relaxed further to allow for 100 percent foreign equity ownership in these financial institutions. The MIFC portal has also been launched as the primary source of comprehensive online information on the latest initiatives and developments, and enables convenient access to application forms, procedures and guidelines related to entrance and participation in the MIFC. This Portal, is now accessible online at www.mifc.com. The large gathering of practitioners here for these two days to discuss the wide ranging matters that relate to issuers and investors will contribute to enhancing the collective understanding and expanding the boundaries of our knowledge on the opportunities in the sukuk market and the potential that the Malaysian sukuk market provides and its linkages with other international Islamic financial systems.

More recently, the Government announced its Growth Plan a few weeks ago. As with any fiscal package, this plan embodies a variety of demand, supply and market impacts that are relevant for the macroeconomic outlook. We will need to assess all these elements and the interactions among them within our November forecast. At this stage, I would simply make two preliminary observations. On my reading, these fiscal announcements will, on balance, provide a further stimulus to demand relative to supply over the medium-term, monetary policy relevant horizon. This will add to the inflationary pressure coming from the EPG. And, the volatile market dynamics that followed the announcement of the Growth Plan underline the need to bolster the credibility of the wider institutional framework, in line with my earlier remarks. Second (and fittingly), second-round effects. As I have already mentioned, it is crucial that we prevent higher current headline inflation from becoming embedded in inflation expectations and price and wage setting behaviour, a risk intensified by the current tightness of the labour market. Heading off this risk will prevent the current energy pricedriven overshoot of the inflation target from becoming more persistent and requiring a more painful monetary policy response down the road. 6/8  BIS - Central bankers' speeches  As I have already said, the EPG helps somewhat in this regard. But, at least in my view, it remains too early to declare victory on this front.