our understanding of the renminbi financial markets and to see the renminbi as a viable choice of currency for financial investments. in november 2015, china granted rqfii country quota of rmb50 billion to malaysia to enable financial institutions here to invest in china ’ s onshore financial markets. the renminbi financial market in malaysia remains incomplete with limited investment avenues. liquidity needs to be deployed and invested to generate returns. as the liquidity pool increases, financial institutions should capitalise on this and develop the range of renminbi money, bonds and equity products, which can leverage on the rqfii access. the impact of the chinese economy on asia, including malaysia has been significantly broadbased and encompassing. financial linkages with china have strengthened. china ’ s financial markets, already among the world ’ s largest markets, will be home to a growing number of global chinese multinational companies with global outreach. the strong interest and commitment to infrastructure building and financing will be a long term theme that will shape asia and china ’ s presence in the global markets. there are huge potential that lies ahead and we must be ready to tap the opportunities in all these initiatives. our financial institutions, corporations and businesses should work together to ensure the readiness of our businesses and economy to keep up with the developments and capture these opportunities. with this, i wish you will have a fruitful discussion and insightful conference today. 4 / 4 bis central bankers'speeches

malaysia is a net receiver of fdi from china and with substantial exports to china – banks should be proactive in approaching clients to facilitate these flows in renminbi. banks with regional presence should also expand its renminbi business through its branches overseas, using malaysia as a launch pad and leveraging on the renminbi liquidity infrastructure available in malaysia. the offshore cnh renminbi market is well developed, and the gap between cnh and cny markets has narrowed significantly. as such, banks should be able to offer competitive pricing for clients to manage and hedge renminbi exposures. with the various liquidity facilities in place, we can expect the renminbi market here to be able to meet their requirements. 2. second, is to further develop the renminbi foreign exchange onshore market to increase the depth and liquidity. the daily foreign exchange volume in malaysia is around usd7 - 8 billion, while the renminbi fx transactions accounts for less than 1 % of the daily volume. this certainly does not commensurate with the investment and trade relationship that we have between our two countries. how can we further build on this with the existing infrastructure in place? one area that bank negara is looking at is to learn from our baht - ringgit cross currency market framework that we developed with our thailand counterpart by appointing market makers, which are given certain flexibilities to facilitate doing business. a similar framework could also be considered for the renminbi ringgit cross currency markets. this will enable the market maker banks to play a larger role in enhancing the renminbi fx activities, not only in the spot market, but also in the renminbi forward and swap markets, which will result in lower foreign exchange transaction cost to the real sector. another area that we are developing is to introduce a flexible hedging framework for residents to hedge their foreign exchange exposures up to a certain limit. this framework is specifically made available for the usd / myr and the rmb / myr pair. under this framework, within a small limit, it suffices for residents to declare their intent and they are free to manage their exposure within this. last week, bank negara had begun engagement with the treasurers on this framework and we hope to finalise this soon for immediate implementation. 3. third, is to capitalise on the infrastructure financing opportunities. malaysia has a comparative advantage in this area. the malaysian bond market is the largest