India started introducing Islamic financial products and services last year. It has launched its first Islamic stock market index on the Mumbai stock exchange and also licenced a non-bank financing company to operate on Shariah principles. As more countries cater for Islamic finance, the scope for cross-border Islamic finance increases. We are beginning to see more cross-border sukuk issuance within Asia as well as between the Middle East and Asia. Singapore has benefitted from this favourable global environment for Islamic finance. •  Singapore is the only non-Muslim majority country among the top 15 countries for Islamic finance. •  Islamic assets under management have surged nearly fourfold over the last five years. More than 40% of the Islamic assets in Singapore are managed by our asset management industry. •  15 banks are involved in Islamic banking, double the number five years ago. They hold about a third of the Islamic assets in Singapore. •  The rest of the Islamic assets are in outstanding sukuk and takaful. Singapore has had nearly 30 sukuk issuances to-date, with seven in 2013 alone. The prospects for Islamic finance in Singapore look bright. •  More funds continue to be established here, to meet demand from clients in Asia as well as from the Middle East. •  Several corporations have established sukuk programmes in Singapore to tap the market over the next few years. BIS central bankers’ speeches  1  We can grow faster when we grow together.
With a four per cent return on the Petroleum Fund, the use of petroleum revenues will rise to almost five per cent of mainland GDP in 2010. The inflation target provides an anchor for expectations concerning future inflation and interest rates. The inflation target is set at 2½ per cent. Monetary policy affects the economy with a lag. The current level of inflation does not provide an adequate basis for determining the level at which interest rates should be set today. Our analyses indicate that a substantial share of the effects of an interest rate change will occur within two years. Two years is thus a reasonable time horizon for achieving the inflation target. Economic agents can act on the assumption that the inflation rate will be 2½ per cent. If it appears that inflation will be higher than 2½ per cent with unchanged interest rates, the interest rate will be increased. If it appears that inflation will be lower than 2½ per cent with unchanged interest rates, the interest rate will be reduced. There is symmetry here. It is equally important to avoid an inflation rate that is too low, as it is to avoid an inflation rate that is too high. The interest rate is the most important monetary policy instrument. It affects price inflation through two channels: demand for domestic goods and services and the krone exchange rate. Changes in labour costs influence the rise in prices for domestically produced goods and services.