these stark differences across demographic groups in terms of levels of unemployment are also evident in terms of how unemployment changed over business cycles, including the great recession. while the overall unemployment rate increased from 5 percent in december 2007 to 10 percent in october 2009, it increased substantially more for workers with lower earnings. in other words, looking at the national unemployment rate tells only part of the story of the labor market experiences for different groups of individuals. understanding this diversity is critical to better understanding the health of the labor market and the overall economy, and is important for informing policy. now let ’ s turn to housing. macroeconomists focus on aggregate residential construction as a measure of how the housing sector is contributing to overall economic growth. it is important to note, however, that housing market experiences vary substantially across individuals in ways not reflected in the aggregate construction data. for example, the type of housing units typically occupied by low - income households saw higher - than - average rent inflation from 2009 to 2011. much of this difference appears to be due to contrasting ways that additions to the housing stock enter into different segments of the housing market. for households in the highest income quintile, new construction more than accounts for the net increase in housing bis central bankers ’ speeches units, which in turn tends to hold down rent increases for these households. however, as one moves down the income distribution, new construction represents a smaller share of the net increase in housing units. for households in the lowest income quintile, additions to rental supply come more from units that with age have depreciated and are no longer rented by higher income households. these supply additions tend to have higher rents than existing units rented by low - income households, thus putting upward pressure on rental costs. the diversity of experiences is also evident with respect to access to mortgage credit, both for households attempting to transition to homeownership and for homeowners who want to trade up. we have also been monitoring mortgage originations at the zip code level using the new york fed ’ s consumer credit panel. when we rank zip codes by their 2012 average adjusted gross income, we see mortgage origination volume in the lowest quintile locations was 38 percent of the volume for the highest quintile locations in 2007. by early 2015, this ratio had fallen to only 14 percent. as highlighted by these examples, and as you ’ ll hear during today ’ s presentation, data at the aggregate level and at a more micro - level illustrate different

a fair rate of exchange between goods and services that are produced in the domestic economy with those that are produced abroad. trade and investment is facilitated by an exchange rate that is stable and reflective of economic fundamentals, not by one that is volatile and unstable and subject to speculative capital flows. the exchange rate should also not be manipulated to cater to narrow sectoral interests. for every change in the exchange rate that benefits one sector, there would be another sector that is disadvantaged. therefore, the exchange rate policy has to rise above sectoral interests and consider the overall economic implications in deciding on the appropriate exchange rate. it is also not prudent to respond to short - term trends or to focus solely on developments in bilateral exchange rates. malaysia has trading and investment relations with many nations. we therefore, cannot look at movements of any particular currency pair as a basis for determining the appropriate valuation of the ringgit. a longer - term perspective to exchange rate policy is taken, looking at the relationship between the exchange rate and economic fundamentals. of greater importance is to focus on enhancing our overall productivity and competitiveness against all our major trading partners. the pegged exchange rate has served malaysia well. it continues to serve malaysia well. this is manifested in terms of the significant growth in the volume of trade and the steady inflow of foreign direct investment. in trade - weighted terms, the exchange rate is not misaligned. since the ringgit peg to the us dollar, the ringgit real effective exchange rate ( reer ), which is the trade weighted value of the ringgit against our major trading partners ’ currencies after taking into account changes in our inflation relative to those of our trading partners, has fluctuated within a range of plus or minus 7 %. this is well within an acceptable range. more importantly, the ringgit reer has not experienced a sustained trend towards increasing appreciation or depreciation. the ringgit has essentially gravitated around its fair value and has not experienced misalignment. finally, the malaysian economy has both external balance in the form of a sustainable current account and internal balance in the form of price stability. this again supports the ringgit being fairly valued. in addition, foreign direct investors have placed more importance on factors other than just the exchange rate alone. in managing exchange rate policy, no amount of exchange rate manipulation would satisfy the interests of all parties at all times. indeed, it is a stable and fundamentally sound exchange rate system that will best serve