impose the reserve requirement was a difficult one as it entailed a painful tradeoff between investor sentiment and export sector competitiveness as well as economic stability. in the end, cost - benefit analysis led us to choose the latter given the importance of export sector stability to the overall economy. indeed, during the first three quarters of 2006, net exports accounted for 5. 1 per cent out of 5. 3 per cent gdp growth in total. losing export sector stability will result in economic instability. as a small open economy, thailand relies a great deal on international trade. let me be clear that the reserve requirement was designed to preserve economic stability and to give time for the export sector, which includes many sme operations, to adjust. the reserve requirement was not designed to maintain a certain exchange - rate level. as such, the reserve requirement is not a permanent measure ; it is temporary. in addition, the intended benefits of measures such as these will tend to decrease as people find ways to circumvent the regulation over time. therefore, after the appreciation momentum was broken, we gradually adjusted the measure to add flexibility without compromising the original objective of maintaining baht stability. now, firms borrowing from abroad can either set aside the required reserves or fully hedge their loans. similar flexibility will be extended to other types of inflows in due course. capital outflows will be further liberalized while a better database of capital flows is being built. this leads me to my third and final point : how to deal with the challenge of global dynamism in the medium term. the critical challenge for the thai economy is how to continuously improve its flexibility, efficiency, and competitiveness amid ever - changing global economic conditions and structure. in this respect, we need to engage in financial and real sector reforms and policies that promote a sound and stable macroeconomic environment. to mention a few examples, our financial and legal infrastructures will continue to be strengthened particularly through amendments and the introduction of a number of legislations such as the new financial institutions act and the deposit insurance act. the financial sector master plan ( fsmp ) will move into its second phase, with the review of the plan and an emphasis on increased competition and consideration on potential entry of new players to further enhance financial efficiency and resiliency. the real sector must also work continuously to improve productivity. sustained economic growth cannot happen without productivity growth. to this end, significant real sector reforms have been made to raise real sector productivity, promote transparency

assistant governor ’ s welcoming remarks at the signing of the first esg islamic repurchasing agreement speaker : encik adnan zaylani mohamad zahid / venue : ibfim kuala lumpur / language : english / speech / interview date : 17 jun 2022 / distinguished guests, ladies and gentlemen. assalamualaikum w. b. t and a very good afternoon. malaysia has been ranked first among 135 countries in the global islamic finance development indicator and first among 81 in the global islamic economy indicator, both for the 9th year running, something we are all proud of. the financial sector blueprint 2022 – 2026 sets out bnm's development priorities for the financial sector over the next five years. one of the thrusts is to “ advance value - based finance through islamic finance leadership ” aimed at spurring growth that is progressive, sustainable and inclusive. this includes strengthening malaysia ’ s proposition as an international gateway for islamic finance, augmenting the malaysia international islamic financial centre ( mifc ) agenda. as part of our effort to raise the bar and catalyse global opportunities, there will be several areas of focus but one that is highly relevant for today is our emphasis and a greater focus on opportunities in sustainable finance. this builds on our pioneering work in vbi, and synergise with our efforts on climate and environmental risks – a key piece of the sustainable finance agenda. the sdgs funding gap of oic countries is estimated around usd 1 trillion a year, hence represents a major opportunity for us. our robust regulatory infrastructure, sound shariah governance framework, wide international connectivity, diversified players and products, elevated by the malaysia international islamic financial centre ( mifc ) agenda, provides a conducive landscape for the islamic financial industry to tap into emerging opportunities in these areas of focus. to underpin this is the development of a vibrant islamic financial market. as part of financial market committee ’ s ( fmc ) effort to further develop the onshore financial markets, we have established two subcommittees : the bond market subcommittee and the islamic financial market subcommittee to formulate specific market development initiatives to take us forward. the creation of these subcommittees underlines the importance of both of these markets in the context of overall development of the domestic financial markets. the islamic financial market subcommittee will review the current landscape to identify and address challenges to the continued growth and development of the islamic financial market, particularly in light of the growing importance of malaysia '