Central Banking and Monetary Policy in Muslim-Majority Countries
Show Less

Central Banking and Monetary Policy in Muslim-Majority Countries

Akhand Akhtar Hossain

This book reviews key aspects of central banking and monetary policy in selected Muslim-majority countries. While reviewing country-specific experiences and issues in inflation and monetary policy, and analysing them from an historical context, emphasis is given to the evolution of Islamic banking and finance and the consequent institutional developments for maintaining price stability. One recurring theme is that, although Islamic banking and finance may have created some complexities, it remains consistent with Classical monetary theory and has created opportunities for improving the infrastructure of central banks and monetary policy to maintain both price and economic stability. The introduction of Islamic banking and finance strengthens the argument for low and stable inflation and rule-based monetary policy. Monetary policy frameworks in these countries include exchange-rate pegging, monetary targeting and inflation targeting under varied restrictions on capital flows. Macroeconomic problems under these regimes are also highlighted and their policy implications drawn.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 7: Malaysia

Akhand Akhtar Hossain


Malaysia is one of the major multi-ethnic countries of Southeast Asia. It is a resource-rich, open economy with a population of 29 million. About 60 per cent of its people are Malay Muslims. The remaining 40 per cent are mainly Chinese (predominantly Confucian or Buddhist) and Indian-Tamils (predominantly Hindu) whose ancestors were brought to Malaysia by the British as plantation workers. Malaysia’s geographical size is such as to confer it with low population density, especially in non-peninsular Malaysia, which is forested and endowed with other natural resource endowments including oil and gas. Contemporary Malaysian economic and political history dates from its acquisition of political independence from Britain in 1957. At that time, Malaysia was an agricultural economy and a major exporter of some primary commodities, namely rubber and palm oil. The population was overwhelmingly rural and desperately poor. Malaysia has made impressive economic progress and is on the way to becoming a developed country by the end of the current decade. This remarkable economic transformation, achieved partly through post-1997 improvements in the quality of its macroeconomic management, has drawn considerable interest from policymakers and development economists across the globe. One major criticism against Malaysia’s economic transformation is that it was not associated with the establishment of a liberal democratic system to back a market economy.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.