According to the textbooks, exchange rates are governed, to a large extent, by differences in present and future monetary policies between different countries. In principle, by raising and lowering the repo rate you can control the exchange rate. This affects import prices directly and indirectly, with a certain lag. The same applies to demand and to general price trends. The conclusion has, however, been drawn many times during the last decade that the world is not as simple as this. One recent example is from 1998 to 1999. It is hard to believe that the weakening of the krona during the autumn of 1998, were effected in a larger extent of the interest-rate cuts which were made at that time. The krona strengthened considerably during the following winter, when exchange rate differences, compared with the outside world, remained unchanged. The fact that the krona has weakened during the past year can, of course, be to some extent due to monetary policy. But stock market trends, fluctuations in expectations of growth and the outflow of portfolios have also played their part. A reasonable conclusion is that short-term interest rates can have an effect on the exchange rate, but that their importance varies quite a lot over time, and is dependent on many other factors. These factors are not always as easy to identify, even after the event. BIS Review 38/2001  3  One comforting factor in this connection is that the link between exchange rates and price trends seems to have weakened during the 1990s.
Encik Abu Hassan Alshari Yahaya: Islamic finance - potential growth areas and challenges Address by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 14th Kuala Lumpur Islamic Finance Forum (KLIFF) 2017, Kuala Lumpur, 3 October 2017. * * *  Islamic Finance the Road Ahead: Meeting New Challenges and Opportunities Last year at KLIFF, I talked about the need for the industry to reflect on its existing strengths; and to build new capabilities to create new engines of growth within the industry. To seize various growth opportunities and to continuously reinvent; re-energise; and re-anchor the industry. Today, I would like to elaborate on potential growth areas and challenges that are in store for Islamic finance. Without a doubt, Islamic finance has made great strides both domestically and globally. We have witnessed the expansion of industry players – from a few financial institutions to a diverse set of players. Customers that prescribe to Islamic finance now, enjoy a wider range of financial products and services that meet their needs. Globally, Islamic finance has continued to grow to reach USD1.9 trillion of financial assets in 2016 – with increased domestic market share for Islamic banks in 18 countries1. Within our shores, progress has been made at many fronts. The Islamic banking share of assets has quadrupled from 7.1% in 2001 to 28% in 2016. Takaful penetration now stands at 14.6% of the population2.