Despite Malaysia’s lower 2/8  BIS Central Banker's Speeches  dependency on commodities, the magnitude of ringgit depreciation is disproportionately higher and is even comparable to the currencies of countries that rely more heavily on commodities, such as Australia and Norway. For the record, in 2015, commodities constituted only 19% of Malaysia’s total exports. For example, the oil and gas industry accounts for only 11% of total exports, about 1% of total employment, and 22% of Government revenue. I must emphasize that adjustments in the ringgit should be viewed from a long-term perspective. In the short-term, exchange rate movements could react to new headlines and market sentiments, instead of reflecting the underlying strength of the economy. What is important, therefore, is to ensure the availability of ample reserves, maintain strong economic fundamentals and manage our exposure to external debt. There has been increasing discussion among global policymakers, including at the recent symposium at Jackson Hole, on the changing nature of our international monetary system. Some measures proposed include encouraging the use of Special Drawing Rights (SDRs) by the International Monetary Fund to increase the flexibility of the current monetary system. The G20 framework also stressed on countries’ shared responsibility in supporting “strong, sustainable and balanced growth” globally. Ultimately, there is an increasingly compelling case for a new thinking about the international monetary system and ways to reduce excessive volatility in global markets.

Meanwhile, NPL and delinquency have continued to decline, as the ratio of NPL, net of provisions, to total loans has declined further to 2.7 percent as banks attentively monitored their asset quality. Moreover, profit continued to be recorded for nine consecutive years, and the overall capital position of the banking system strengthened further, with BIS ratio at 16.1 percent, of which 12.6 percent is Tier 1 capital. Much of the current strength and resiliency of our banking sector owes a great deal to the reform groundwork laid during the past decade. On prudential supervision, as apart from requiring banks to conform to international best practices on risk-based supervision under Basel I and now Basel II, the Bank of Thailand also moved to strengthen our supervisory function, utilising both on-site and off-site supervision as well as asking banks to carry out stress tests on a regular basis. The key here was to strengthen banks’ own risk management culture and system. Works on strengthening the financial infrastructure were started and are still on-going. In this regard, various initiatives were introduced, including the long-term effort to reshape the financial system, and address inherent structural weaknesses, that was the mission of the Financial Sector Master Plan Phase I. The establishment of the National Credit Bureau to improve credit information, and improvements in financial legislations, including the new Financial Institutions Business Act, the Bank of Thailand Act and the Deposit Protection Agency Act. Today, our banking sector fundamentals continue to be strong, serving as a dependable pillar for our economy.