Marzunisham Omar: Capital flows management for monetary and financial stability Remarks by Mr Marzunisham Omar, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Seminar and Meeting of the SEACEN Expert Group on Capital Flows, Kuala Lumpur, 11 June 2019. * * * I am delighted to be here today. Let me take this opportunity to express Bank Negara Malaysia’s appreciation for the collaborative efforts of the SEACEN Centre and the Bank of Japan that have gathered us here for this biennial SEG event. It has been six years since I last attended the SEG Seminar in Manila, back in 2013 as the newly appointed co-chair. I am truly honoured to have had the opportunity to work alongside Deputy Governor Diwa. Under his capable stewardship and intellectual guidance, the SEG has developed into a beneficial platform for its members since it was established 19 years ago.
Given the multifaceted risks posed by capital flows, policymakers must be able to avail ourselves of a broad range of policy instruments. These policy instruments include interest rate, exchange rate, macroprudential and capital flow measures. In deciding which instruments to use, we should avoid ruling out the use of any policy tools upfront. Rather, the choice of instruments needs to be tailored to the specific risks being managed and the circumstances the economy is facing. In addition, the choice of policy instruments also needs to be considered in an integrated manner to increase the efficacy of policies, minimise potential trade-offs, and avoid overburdening of any single policy tool. Finally, I would like to briefly touch on the role of SEG and SEACEN in dealing with this issue. Earlier, I mentioned the importance of surfers learning how to deal with all types of weather and wave conditions. What I did not mention is the fact that it is impossible for them to learn these skills individually. In Pro Surf Bali, one of the most popular surfing schools in Bali, surfers come together to share their experiences surfing in the toughest conditions, and in doing so, prepare each other for possible eventualities. The SEG forum on capital flows is in a unique position to achieve this objective. The forum can facilitate deeper awareness and understanding of member countries’ challenges in dealing with capital flows. The frank exchanges of experiences and policies will place member countries on a stronger footing when facing the next wave of capital flows.