zeti akhtar aziz : knowing nusantara – money that made the region opening speech by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the launch of “ knowing nusantara : money that made the region ”, bank negara malaysia museum and art gallery, sasana kijang, kuala lumpur, 26 august 2014. * * * the numismatic heritage of the malay archipelago is as rich as the region itself. there were few other regions that had such a level of trade that has existed in this part of southeast asia. every type of seafarer had been here over the centuries, bringing with them a wide range of currencies. from chinese copper cash to south american “ pieces of eight ”, nusantara has been a magnet for money of all shapes, sizes and materials. when these are combined with the indigenous currency minted in the archipelago, the legacy is immense. “ knowing nusantara : money that made the region ” explores the coins and banknotes that have circulated in the malay archipelago, telling a story that goes back 2, 000 years and that continues to evolve. by telling this story, the objective is to create a deeper understanding of the region. the history of the archipelago is largely about contact and the interconnectivity that existed in the region even during that period. movement between islands and the mainland are mirrored by the encounters between the indigenous and foreign peoples. farmers, traders, rulers, missionaries and the military have all had a part in the cosmopolitan societies that existed in nusantara. money has taken many forms over the millennia, and our region has seen a greater diversity than most. cowrie shells, tin “ tampan ” and brass gongs are some of the more exotic stores of value. but among coins and banknotes there are some equally distinctive means of making commercial exchange a safe and convenient activity. nowadays the central banks have taken on this role. in the past, there was less clarity about issuing authorities. many different currencies could circulate in the same location, resulting in a variety of payment options. often this resulted in confusion and even counterfeiting. in this exhibition there are examples of forgeries intended to deceive, along with local copies that represented a tribute to the originals. good designs have always had their admirers, some of whom have created coins to pay homage to innovations such as the pohon pitis,

banking systems and broader economy. these changes are expected to strengthen significantly the stability of the financial system. this will increase the confidence in the financial system as a " conditio sine qua non " for the functioning of the financial markets. in the case of macedonia, which follows and will appropriately adjust to the changes in the world financial system, the crisis emphasized the existing weaknesses of the macroeconomic reality : the high import dependence of the economy, high export concentration, vulnerability of the sources of financing of the balance of payments deficit and currency risk, which can be easily transformed into a credit risk as a threat to the financial stability. therefore, in a short run, we have to maintain the appropriate level of foreign reserves, as a precondition for maintaining the confidence in the stability of the domestic currency. in a medium run, more serious structural adjustments are needed, which will lead to narrowing of the trade deficit, primarily through increased export, which will enable higher growth rates of the economy and containing of the significance of the vulnerable sources of financing of the current account deficit. as a conclusion, macedonia has succeeded in maintaining the confidence in the financial system, i. e. in the banking system. that was possible due to the prudential macroeconomic policies and sound supervision of banks. however, the struggle for maintaining the confidence is a constant effort. risk management is never a completed process. we should always have in mind that the costs for regaining the lost confidence are always and everywhere incomparably higher than the investment in its maintaining. thank you for your attention and i wish you a successful work in the forthcoming period.