Encik Adnan Zaylani Mohamad Zahid: A way forward for the Malaysian Renminbi market Speech by Mr Encik Adnan Zaylani Mohamad Zahid, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the RMB Conference, organized by Bank of China "A Way Forward for the Malaysian Renminbi Market", Kuala Lumpur, 1 November 2016. * * * It is an honour to be here this morning to speak at the Renminbi Conference organised by Bank of China. Over the last seven years since the internationalisation of renminbi took off in earnest, we have seen the progress and evolution of the currency from its primary use in trade settlement to become a currency of choice for investment and financial instruments, reflecting China’s growing presence in global finance as well as various economic initiatives related to its ‘One Belt One Road’ vision. To this effect, it is important for Malaysia, being a key partner for China in the ASEAN region, to strengthen the renminbi connectivity not only to facilitate our bilateral trade but also to become a launch pad for China’s initiatives in this region. Today also marks one month since the inclusion of the renminbi into the Special Drawing Rights (SDR) currency basket, which is undoubtedly a watershed moment for renminbi given its relatively recent internationalisation over the last seven years. I have no doubt that with the inclusion, more central banks will be adding renminbi into its international reserves.
I will turn to the question of three of the new expectations on central banks, that we at the ECB are currently discussing as part of the Strategic Review rightly initiated by Christine Lagarde. I. Inflation remains the principal edifice of the Central Bank's Construct I.A. The past: had inflation disappeared? When it comes to inflation, the last decade left economists and central bankers confronting a number of puzzles. The Great recession of 2008-09 exhibited a “missing deflation”, when the important contraction of output was not associated with a consequent fall of prices. The recent years, on the contrary, were characterised as a period of “missing inflation”. The vanishing level of inflation has been a pervasive and global phenomenon. It can be grasped with a simple comparison of the inflation rates in the first and the second decades of the 21st century. Page 2 sur 9  The inflation rate of the Euro area was 2.1% on average from 1999 − when the euro was created − to 2007 − when the financial crisis started. It dropped to 1.0% over the period 2013−19 following the double dip recession and until the current pandemic. At more than one percentage point, this is a substantial decline between the two periods. Headline inflation in the US experienced a similar decline, having dropped from 2.7% to 1.6% between the two periods. In the early 2000s, the euro area’s inflation rate was in line with the ECB’s price stability mandate, defined as a target of “below but close to 2%”.