consistent with the principles of sustainability. the islamic banking industry, through the vbi community of practitioners, has also issued the value - based intermediation financing and investment impact assessment framework ( vbiaf ) sectoral guides, a set of detailed impact - based risk assessment toolkit for application in financing and investment decisions. thus far, sectoral guides on palm oil, renewable energy and green energy efficiency have been issued with a few more in the pipeline. likewise, the takaful industry has issued the vbi for takaful framework that integrates the principles of vbi into products and business practices that promote financial resilience and climate risk management for households and businesses. these complement the climate 2 / 4 bis central bankers'speeches change and principle - based taxonomy document issued in april this year that supports businesses transition paths by recognising climate risk mitigation and adaptation efforts over time. my third and final thrust that i would like to touch on relates to key prospects and opportunities to islamic finance. malaysia has thus far been at the forefront in the global halal economy. the nation ’ s success is attributed to a strong supportive ecosystem of which islamic finance is a key pillar. the malaysian islamic finance industry players have been supporting malaysia ’ s halal industry through the offering of customised halal financing packages. these entail supportive ancillary services that complement the industry ’ s existing financial solutions such as business matching and advisory services. such packages are currently made available by five islamic banks on the halal development corporation ( hdc )'s halal integrated platform, a one - stop online advisory portal for halal companies. more institutions are expected to participate later this year. in this space, there are continuing ample and growing opportunities for islamic finance to tap on as we ramp up in high value - added sub - sectors such as halal pharmaceutical and cosmetics, as highlighted in hdc ’ s sectoral development roadmap. islamic finance also is primed to support initiatives under the national investment aspiration ( nia ). as the new national investment policy strategy, the nias aim to increase malaysia ’ s capacity to produce more complex and high - value products and create more high - skilled jobs5. this, in turn, will result in malaysia producing new lines of goods and services beyond the traditional and upstream products, which will require support including in trade financing in developing businesses across these new product supply chains and penetrating new markets. the different nature of these needs, however calls

enterprises ( smes ) have increased their role in the domestic economy. new areas of growth are also emerging, ranging from the shared services and outsourcing industry to agrobusiness, biotechnology and islamic finance. the flexibility of the economy to continually adjust to new areas of activity has been an important factor contributing to the dynamism of the economy. about a year ago, malaysia took the opportunity to transition into a more flexible exchange rate regime. this has been achieved in an orderly manner. of importance was that the preconditions had been put in place to ensure this orderly transition. the banking sector had been strengthened, the bond market had been developed, and the capital account had been sequentially liberalised. these developments were reinforced by the further deregulation and liberalization of the domestic financial system, thus creating a more competitive financial environment. the successful transition to the new regime following these developments has seen a two - way movement in the exchange rate that reflects the underlying economy and the market conditions. monetary policy in this environment will continue to be conducted in a manner that will ensure that the long - term growth prospects of the economy is achieved with price stability. as a small, open economy, malaysia is not insulated from the inflationary forces being felt globally. in this regard, decisions on monetary policy will be determined by the bank's assessment of a broad range of indicators of the domestic economy. the overnight policy rate ( opr ) remains the signalling mechanism to achieve the policy objectives. interest rates, therefore, is not an instrument to influence capital flows or the exchange rate. the bank continues to undertake initiatives to enhance communication to promote greater understanding of the objectives, processes and conduct of monetary policy. extensive deliberations in assessing the latest domestic and global economic, monetary and financial developments are conducted at the monetary policy committee ( mpc ) meetings, which are held eight times a year. the monetary policy statement ( mps ) remains the key monetary policy communication tool of the central bank to provide the rationale for monetary policy decisions. given the pronounced changes in the economy and the significant changes taking place in the financial sector, the industry would essentially need to respond to the new challenges arising from : i. greater linkages, integration and interdependence between nations. this trend is likely to intensify as more countries embark on initiatives to promote closer regional economic and financial integration, to enhance their level of economic performance. ii. the challenge of intensified competitive pressures, arising not only