zeti akhtar aziz : growth and development in the asian region dinner address by dr zeti akhtar aziz, governor of the central bank of malaysia, at the iclif alumni association dinner, kuala lumpur, 17 february 2006. * * * it is my pleasure to be here this evening at this inaugural annual dinner of the iclif alumni association. this occasion provides an excellent opportunity to promote greater engagement and networking among the industry leadership. this is particularly important for our region where the financial sector has experienced a pronounced transformation in the financial landscape. there will be new dimensions and new requirements for leaders and leadership capability in this new and highly challenging environment. it calls for being able to meet the new demands of the new economy, being able to perform in a more competitive environment, being able to reap the benefits of the new technologies and finally being able to operate in an environment of heightened uncertainty. despite these increased challenges, the world economy has entered 2006 on a stronger note. the latest indicators suggest that the global economic outlook remains favourable, with sustained growth across the major economies. while the us and china are expected to continue to experience strong growth, it is expected that the recoveries in japan and europe would provide additional support to global demand. this provides a positive external environment for asia. in the asian region, domestic demand has proved resilient with most countries experiencing a strengthening of domestic demand. cumulatively, this rapidly expanding domestic demand has represented an important market for the region. it has also increased the pace of regional integration. while energy prices have remained high, this is not expected to undermine the global growth momentum. oil price increases thus far have mainly been demand - driven, and therefore, well absorbed compared to historical episodes of oil shocks. however, the tight global supply conditions that prevail have not removed the risks of higher oil prices. the inflationary trends that have emerged, has prompted the monetary authorities in a number of countries to raise interest rates. while the degree has varied across countries, these moves have primarily reflected the need to anchor expectations and limit the second - round effects of rising oil prices. this has therefore continued to allow monetary conditions to remain supportive of growth. in view of the broadly favourable outlook for the global and regional economies, renewed attention has been focused on the prevailing imbalances in the global economy. this is a pertinent issue especially as these imbalances are expected to widen in 2006. it is recognised that reducing the global imbalances

liquidity to intermediate the portfolio adjustment by non - residents. the underlying motivation of the fmc is to create a deeper and more liquid onshore market that will enhance its capacity to intermediate these flows and strengthen our resilience against excessive volatility. despite the havoc caused by episodes of volatility from the opaque, unregulated and value destroying activities of the ndf market, the fmc in identifying the possible remedial measures have concluded that market based mechanism and solutions is still the best way forward. through close consultation with various stakeholders, including corporate entities and small and medium size enterprises, the fmc developed a series of targeted initiatives to develop the onshore financial market. the first series of initiatives announced on 2 december 2016, seeks to provide greater room for the onshore ringgit hedging for both resident and non - residents. the focus was on ensuring better access to the onshore financial market. in particular, residents can now hedge without providing underlying documents up to certain limits, while registered non - resident investors have the flexibility to carry out dynamic hedging. at the same time, the scope of the appointed overseas office framework was widened to provide greater avenues for non - residents to access the onshore financial market. 3 / 6 bis central bankers'speeches the second series of initiatives announced on 13 april 2017, introduced greater flexibility for investors to manage currency and interest rate risks. registered investors can now conduct full dynamic hedging and resident investors can now conduct short - selling for malaysian government securities. all these flexibilities are expected to increase the ease of hedging business risks. the aim is to promote a two - way liquidity in the onshore financial market. at the end of the day, we envision that the implementation of these initiatives will make the domestic financial market a market of choice, where prices are determined by the real economy devoid of speculative and damaging activities. in this respect, we have introduced initiative that enables non - resident investors to access and hedge ringgit assets in the domestic markets. we are mindful that for the ndf market to truly reduce in significance and adverse influences, the onshore market must become highly competitive, not just the foreign exchange market but also all aspects of the financial market. we are determined to realise the idea of having a market that possesses the breadth and depth to cater to the increasingly complex and diverse needs of the economy, and a market that is able to sustain and weather volatilities that contribute