marzunisham omar : comprehensive approaches to monetary and financial policy making in asean - 5 countries welcome remarks by mr marzunisham omar, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the third bnm - imf seminar, kuala lumpur, 17 july 2019. * * * in his remarks at this seminar last year, odd per quoted the book enchanted ; “ first time is luck, second time is a coincidence and third time is a tradition. ” here we are gathered today for the third bnm - imf seminar to celebrate this “ tradition ”, a tradition i hope will continue for many years as we can all agree that candid and open dialogue between the imf and asean - 5 central banks is mutually beneficial. let me take this opportunity to thank the imf and the team at bank negara malaysia for organising this seminar and to my colleagues from the region for being highly supportive of this effort. the topic today – “ comprehensive approaches to monetary and financial policy making in asean - 5 countries ” – is indeed timely given the ongoing work at the imf on the “ integrated policy framework ”. i hope today ’ s seminar will help shed greater insights on how central banks in asean economies, which are small, open economies, navigate through increasingly complex, interrelated issues in our pursuit of preserving monetary and financial stability. i have no doubt that we in asean will also find today ’ s seminar useful in understanding the imf ’ s latest thinking on these issues. there are two parts to my brief remarks today. first, i will touch on the increasingly complex policy making environment given the openness of our economies. second, i will posit three issues that we need to grapple with in considering the optimal policy mix towards achieving monetary and financial stability. our mandates are to preserve monetary and financial stability, which are critical conditions for sustainable growth. in the pursuit of these mandates, a key consideration is the openness of our economies. while the integration of our economies with the global economy and international financial markets has yielded substantial benefits, it has also made our economies more susceptible to external shocks and spillover effects from global developments. let me briefly touch on some of these external factors : first, global growth momentum is slowing. a key issue is how deep and prolonged the slowdown will be. a key risk is the ongoing trade tension and its impact on global trade, investment and sentiments. for many of our countries that depend heavily on international trade,

development on the issuance, trading, information dissemination and settlement system have also been improved to encourage new issuance and sustain existing instruments. in addition, the regular issuance of government securities in both conventional and islamic instruments with different maturities has facilitated the creation of a benchmark yield curve. to meet investors'demand and diversify further islamic financial instruments, the government has recently issued shorter - term islamic treasury bills and longer - term islamic bonds with a maturity of 10 years. with the development of the ringgit bond market it has continued to become an increasingly important source of financing to the economy. total gross financing amounted to rm85. 8 billion. as a result, total outstanding ringgit bonds increased by 10. 7 % to rm363 billion, which is equivalent to 81 % of the gross domestic product. the general market conditions have also remained favourable for both issuance and trading activities, given the low inflation and interest rate environment and the strengthening of economic fundamentals. the islamic bond market has also experienced exceptional growth. in 2004 the market expanded by 13. 4 %. to further enhance market turnover, bank negara malaysia announced in january this year the usage of repurchase agreements as a monetary policy instrument, introduced the institutional custodian programme to enable borrowing and lending of securities, and provided a securities lending facility for principal dealers. the implementation of these measures are aimed at improving the price discovery process and increasing the efficiency of capital allocation within the financial system. to facilitate the further development of the islamic bond market, the government has also imposed tax neutrality between the treatment on islamic and conventional capital market products. it has been just one year since we allowed multilateral development banks and multinational corporations to issue ringgit denominated bonds in malaysia, and we are now witnessing the third issuance of such bonds by a supranational. in that, i am pleased to welcome the ibrd's issuance of its 760 million ringgit wawasan bonds in malaysia. we are pleased to note that the world bank has decided to make its inaugural issuance structured in compliance with the shariah. this would indeed contribute to further broaden and develop the islamic domestic capital market. this islamic securities issuance is the largest ringgit issuance by a supranational to - date. in closing, i would like to thank the international bank for reconstruction and development for the confidence it has placed in the malaysian capital market. we look forward to see other issuances by