effect. low inflation, by contrast, protects the purchasing power of incomes and social pensions and savings, and provides a more conducive environment for investment and job creation by reducing uncertainty about future prices. any mandate given to a central bank should focus on what it can do and not on what we would like it to do. a socio - economic objective such as protecting the buying power of the money in the pockets of south african citizens is an important and attainable objective, and in the area of our core competency. apart from this objective, we also : ensure the availability of good - quality banknotes and coin ; ensure the effective functioning of the national payment system ; prudently manage the official gold and foreign exchange reserves of the country ; strive for a stable financial system ; and regulate and supervise the banking system. as we have seen from the global financial crisis, such crises have a devastating effect on the economy – and it takes many years to recover. it would be counterproductive to divert the sarb ’ s policies away from these important socio - economic objectives in order to try and achieve outcomes over which the sarb has little or no influence. the fact that we do not have an explicit employment or growth mandate does not imply that we have a narrow focus on inflation to the exclusion of these considerations. however, we must be clear about what a growth mandate means for central banks. monetary policy cannot determine the longer - run growth potential of the economy. this is the domain of other policies, as potential growth is determined by structural policies ( e. g. on education, infrastructure, and technology ). south africa ’ s high page - 7 - of 11 unemployment rate is largely structural. the contribution that monetary policy can make to long - run growth is through ensuring price stability, which is more conducive to longer - term investment and expenditure decisions. the higher and more volatile inflation is, the higher the riskiness of investment. monetary policy can, however, impact on the real economy over the economic cycle, i. e. on the extent to which growth fluctuates around potential output. the extremely moderate nature of the tightening cycle since 2014 is an illustration of our concerns for cyclical growth. while it is true that excessively tight monetary policy conditions can undermine growth and employment, the low and at times negative policy rate prevailing in south africa in recent years is indicative of an accommodative monetary policy stance. the bottom line is this : we cannot solve

key note address by ashraf mahmood wathra governor, state bank of pakistan world islamic finance forum ( wiff ) september 05, 2016 respectable senator muhammad ishaq dar, federal minister for finance, revenue, economic affairs, statistics, & privatization, justice ( r. ) muhammad taqi usmani, dr. ishrat hussain, chairman, dr. azmi omar, director general, islamic research & training institute, professor dr. abbas mirakhor, dr. farrukh iqbal, dean and director, center of excellence in islamic finance education - iba, distinguished guests, ladies & gentlemen assalam - o - alaikum it gives me immense pleasure to see global strategic players like international centre for education in islamic finance, the islamic research and training institute, international shari ’ ah research academy for islamic finance ( isra ) joining hands with the centre of excellence in islamic finance education, iba for organizing world islamic finance forum in the largest city of pakistan. this is a clear reflection of pakistan being a significant contributor towards the growth and development of islamic finance industry. i want to appreciate the page 1 of 6 organizers for providing this forum bringing together global thinkers and practitioners who can synthesize the work so far done and build on the core competencies of islamic finance for its sustainable growth. i wish all the best for the success of this global event and a very pleasant stay to the distinguished foreign delegates. ladies & gentlemen the ability of islamic finance to introduce greater discipline into the financial system owing to its inherent strengths indicates this system is relatively more stable and resilient. islamic banking is a growing reality which is expanding outside the traditional borders of muslim countries into western economies ; at present global islamic financial assets have reached us $ 1. 8 trillion in 2015 from us $ 150 billion in the 1990s and are expected to exceed us $ 6. 5 trillion by 2020. asia is expected to be the key driver in advancing the growth of the islamic finance industry ; according to islamic financial services board ’ s ( ifsb ) report, 2015, pakistan is among potential leaders of islamic finance. despite its impressive growth, islamic finance industry cannot be complacent as there still prevails huge untapped market. there are some challenges that the industry is facing in order to sustain its growth page 2 of 6 momentum. i would like to touch upon some of these challenges with respect to the theme of this event. enabling supervisory, regulatory and legal environment, a suitable accounting and