MIFC newsletter quoted Dr Zeti speaking on the theme “Asia in the World: Sustaining the Region’s Transformative Momentum”, Dr Zeti reminded that the rapid integration of Islamic finance into the international financial system is a growing feature in the financial landscape of Asia. “Developments in several emerging economies in Asia have seen the rapid expansion of Islamic finance. Global Islamic financial assets are now estimated to be more than $1 trillion. While more than 60 percent of the world’s Muslim population is in Asia, the interest in Islamic finance transcends to beyond this community,” she said.
Islamic finance brings two important principles to the regional and global financial landscape. The inherent principle of Islamic finance, which requires financial transactions to be accompanied by underlying economic activity, ensures the close link between the expansion in financial assets with the real economy, and increasing its potential in fostering sustainable growth.
Similarly, with the intensification of the internationalisation of Islamic finance, it has an increasing role in bridging economies through the mobilisation and channelling of funds to productive investment activities across borders. Not surprisingly, today there are more than 600 Islamic financial institutions that operate in more than 75 countries. The sukuk market, advised Governor Zeti, is fast becoming an important platform for international fund raising and investment activities that are generating increased cross-border flows.
From an outstanding amount of $33 billion in 2006, the sukuk market has expanded to $180 billion by the end of 2011, of which 66 per cent originated from Asia. The region is also leading a growing trend for multi-currency sukuk issuances, attracting global investors to participate in this market.
Asia, Dr Zeti added, is very much at the centre of the changes taking place in the global economy. The issue is whether Asia will continue its transformative momentum over the medium to longer term, to become an increasingly important source of global growth and stability.