understanding between the uk trade and investment and bank negara malaysia. the early development of islamic finance was very much domestic - centric. this recent decade has seen the internationalization of islamic finance. this has increased the potential for strategic partnerships between international financial centres that will bring with it mutually reinforcing benefits. malaysia has developed a comprehensive islamic finance industry founded on a strong legal and regulatory framework, with a diversified number of islamic banking and takaful institutions and a well - developed islamic money and capital market. today, islamic financial assets comprise 17 per cent of the total assets of the banking system in malaysia and the daily average volume transacted in our islamic money market is rm6 billion. the sukuk market which has been expanding at an average annual rate of 22 %, now accounts for more than 50 % of our bond market. with this financial infrastructure in place, malaysia has recently intensified its pace of liberalisation. in april, the government announced further liberalisation measures that included new licences to be offered in islamic banking and takaful. more specifically, up to two new mega islamic banking licences will be issued to foreign players with minimum paid up capital of usd1 billion to enhance global interlinkages and leverage on global developments in islamic finance. existing domestic islamic banks that wish to scale up their operations and expand into global markets are also given greater flexibility to enter into strategic partnerships with foreign players to raise their capitalization to usd1 billion with a higher foreign equity limit of up to 70 %. in addition, up to two new family takaful licences will be issued in 2009 to players that can offer significant value propositions to malaysia to spur the development of the takaful industry. takaful companies will also be given the flexibility to enter into strategic tie - ups with foreign partners through higher foreign equity limit of up to 70 %, to further strengthen resilience and competitiveness. in addition, international islamic financial institutions can be established to offer the full range of islamic financial services to residents and non - residents in international currencies. another further measure announced is the liberalization of legal profession to allow up to five top international law firms with expertise in international islamic finance to offer legal services in international islamic finance in malaysia. internationalisation of islamic finance several factors are important in sustaining the internationalisation of islamic finance. firstly, is the development of international islamic financial markets to enhance the liquidity of the instruments and the risk management capacity of the players. this is

pressure on inflation from weakness in the economy, and weigh that against the upward pressure on inflation from higher input prices and supply chain disruptions. so let me tell you what we're doing in preparation. in recent years, we have invested in better information on supply chains, trade links and the connections between sectors. and this is helping us analyze the effects of supply disruptions including tariffs. we have begun assessing the possible consequences of different tariff scenarios, and present an example in this mpr. 2 / 3 bis - central bankers'speeches we are stepping up our outreach activities across the country to hear directly from those affected by trade uncertainty. this includes augmenting our surveys of businesses and consumers to better understand how trade uncertainty is affecting their decisions and how they would cope in the event of a trade conflict. we will update you on our analysis and assessments as developments unfold. having restored low inflation and reduced interest rates substantially, monetary policy is better positioned to help the economy adjust to new developments. as always, the bank will be guided by our monetary policy framework and our commitment to maintain price stability over time. with that, the senior deputy governor and i would be pleased to take your questions. 3 / 3 bis - central bankers'speeches