nor shamsiah mohd yunus : welcoming remarks - bnm sasana symposium 2023 welcoming remarks by ms nor shamsiah mohd yunus, governor of the central bank of malaysia ( bank negara malaysia ), at the bnm sasana symposium 2023, kuala lumpur, 8 june 2023. * * * distinguished guests, central bank officials and payment system operators from indonesia, singapore, and thailand, ladies and gentlemen. assalamualaikum warahmatullahi wabarakatuh and good morning. welcome to the inaugural bnm sasana symposium! every year, in march, bank negara malaysia publishes our annual report, along with the economic and monetary review, and the biannual financial stability review. we also publish our quarterly bulletins. these reports describe how we have discharged our mandates over the past year, and provide our thinking, analyses and assessments on the economy and financial system. in the reports, we also discuss important ideas and pressing issues affecting the economy and financial sector in feature articles that help inform and shape long - term initiatives that are necessary to strengthen our economic fundamentals. one of the ways we hold ourselves accountable to the rakyat through our flagship publications is by explaining the key considerations behind the decisions and measures that we take, and the priorities that guide our work. often, this involves complex policy trade - offs that have to be carefully balanced from many angles. our reports, as well as any communications from us, such as our monetary policy statements, often generate lively conversations all around the country – in the press, on social media, and at the dinner table. in recent weeks, my team has been travelling across the country, meeting with members of the public, businesses, community leaders, and students. this is not just to explain our work, but to also hear from them to get a better pulse of the nation. we will continue to simplify our messages to make them more relatable and easier to understand. in the same spirit, today's symposium will offer a further opportunity to engage the public in deeper discussions around our work. it is my hope that the symposium will also serve as a springboard for others to build on in order to move us forward in the interest of the nation. i am sure that the sessions today will be informative, lively and engaging, and so i don't plan to summarise the issues that will be covered. but if anything, i thought that it would be

challenge in the years ahead. i believe the key solution here lies in productivity increases in agriculture and energy in the medium term. regarding agriculture, this necessity is much more evident in emerging markets – in order to keep up with the demand growth, considering the higher share of food in the consumption basket. rapid employment shift from agriculture to manufacturing & services, and the labor - intensive structure of production necessitates a reformation in this sector. likewise, a similar productivity improvement is inevitable for energy both in emerging and developed economies. however, given the limited supply of resources, efficient energy use gains a crucial role at this point. according to the international energy agency, improved energy efficiency in buildings, industrial processes and transportation could reduce the world ’ s energy needs in 2050 by one third ( sophie hebden : “ invest in clean technology says iea report ”, 2006 ). in this context, energy efficiency together with renewable energy, energy obtained from natural resources, are said to be the twin pillars of sustainable energy policy. bis central bankers ’ speeches dear participants, against this backdrop, in the remaining part of my speech, i would like to share our experience in dealing with commodity price volatility, especially in the context of monetary and fiscal policy. volatility in oil and other commodity prices has both direct and indirect effects on inflation. in this manner, there is a debate in the literature on how a central bank should respond to the changes in commodity prices. since oil and other commodity - based products are an important component of consumption basket, it is impossible to avoid the so called “ firstround effects ” of commodity prices, which in turn translates itself into inflation volatility. however, temporary movements in commodity prices do not affect the mediumterm inflation trend, as long as they do not disrupt the general pricing behavior. therefore, central banks acting on a medium - term perspective, typically do not give sharp policy responses to these primary effects as doing so may have strong negative impacts on the social welfare. on the other hand, a persistent increase in commodity prices may adversely affect inflation expectations and therefore pricing behavior of economic agents. this may entail prolonged increases in general price level and, accordingly, high costs associated with increasing inflation. therefore, it is important for central banks to pay close attention to the evolution of inflation and inflation expectations in order to contain the second - round effects of the increases in commodity prices. at the central bank of turkey, we frequently state that we will not react