in 2010–2012, and those foreign currency purchases were made at a considerably lower exchange rate than the recent sales. Furthermore, on 19 February the Bank concluded a forward currency swap agreement with Landsbankinn in the amount of 6 b.kr., which means that Landsbankinn will not need to accumulate foreign currency to comply with the Bank’s foreign exchange balance requirements. The Monetary Policy Committee is of the opinion that intervention of this type is justifiable in order to mitigate temporary exchange rate volatility that is addressed more effectively with  2  BIS central bankers’ speeches  instruments other than interest rates. In recent weeks, the foreign exchange market has been characterised by an unusual combination of features: weakening terms of trade, foreign exchange accumulation in anticipation of heavy foreign debt service, foreign exchange mismatches in the banks’ balance sheets and, in part, self-fulfilling expectations of a currency depreciation. Because these conditions are in part temporary and increased foreign exchange inflows are expected as the spring advances, limited one-off foreign currency sales by the Central Bank were considered appropriate to prevent excessive currency depreciation and stem the tide of these self-fulfilling expectations of market participants. This is consistent with the strategy outlined in the Bank’s report Monetary Policy After Capital Controls, published in late 2010. Capital controls were imposed early in the winter of 2008 as part of the Government’s IMF programme.
Encik Abdul Rasheed Ghaffour: Value-Based Intermediation (VBI) propelling Islamic finance Address by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Value-Based Intermediation (VBI) Dialogue, Kuala Lumpur, 24 August 2017. * * * Over the years, finance has lifted the lives of many, enabled businesses to grow and helped to fund the construction of public infrastructure that we now depend on. Yet, as the global economy transforms and society evolves, the question as to whether the financial sector is sufficiently serving the needs of the real economy continues to be debated. The evidence from the global financial crisis underlines the need for the financial sector to restore its balance with the real economy. There is a need to rethink, reassess and re-strategise the role and contribution of the financial industry. Undoubtedly, there is an increasing expectation for the financial sector to deliver greater impact to the economy and society. I am pleased to be here with you today and be part of this important milestone in our Islamic finance journey. The issuance of the Value-Based Intermediation (VBI) Strategy Paper by Bank Negara Malaysia marks the next step to realising the full potential of Islamic finance. On behalf of the Bank, I wish to thank all of you who have devoted time and effort to work with us in this important initiative.