Despite almost 10 years of ultra-easy monetary policy, and despite stronger growth and better labour market conditions, some countries are still devoid of inflation. This latest enigma of “missing inflation” has further spurred the search for the next best thing after inflation targeting. It has become increasingly clear that the nature of problems facing policymakers and the underlying heuristics are becoming very complex. What we thought we knew about inflation dynamics has been inadequate and has not factored in many other relevant factors. Inflation dynamics have evolved with structural factors such as the global value chain, demographics, technological advancements and the digitalisation of the economy. In such a dynamic environment, it is only logical to think that one must be pragmatic, flexible and agile. This is why we focused on inflation anchoring without being tied to a single numerical target. To effectively do this, our monetary policy framework will take into account a broader consideration of factors that could affect the domestic economy and financial system. It also allowed us some flexibility to monitor how our monetary policy actions could interact with key issues facing the public, such as distributional implications, cost of living, access to financing and financial inclusion. As we understand these interactions better, our responses, including monetary policy decisions, can be more nuanced and effective. Malaysia’s policy approach has remained relevant Inflation anchoring was not the only thing we did differently. In fact, Malaysia has never shied 4/7  BIS central bankers' speeches  away from taking the path less travelled.

Muhammad bin Ibrahim: Public policy perspective - some thoughts and contemplations from a central banker Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 40th Harvard Business School Alumni Club Malaysia Anniversary Dinner, Kuala Lumpur, 9 February 2018. * * * Thank you for the invitation to speak tonight, among such impressive luminaries. I would like to take this opportunity to share, reflect and learn from past experiences. Since my line of work relates to public policy, I would like to approach it from this perspective. The remarkable paradox of public policy Public policy has never been easy. It is deceivingly simple if we just think about the outcomes. For example, the country needs more public healthcare; or prices of goods need to be lower; or people should have more access to credit. In practice, the policymaker makes difficult decisions involving complicated trade-offs, competing objectives and priorities. Resources are limited and invariably, any allocation made will affect many persons in different ways. Public policy can never ever meet the needs of everyone all at the same time. Given these challenges, it stands to reason that there can be no set template or rules when it comes to executing public policies. From this perspective, it is therefore a remarkable paradox that policymaking at the international level is steeped in conventions, rules and norms that set out expectations on how policymakers should behave and conduct policies.