Case studies on how to make the ringgit global

Indian policy: A policy was introduced in India in March 1992 for a partial convertibility of the rupee for foreign exchange to be made available at a low price for essential imports. – AFP

AS mentioned last week in the case of Australia integrating its onshore and offshore market, interbank hedge markets in Australian dollars were established in overseas financial centres with Australian trading banks playing a prominent role in these offshore financial centres by providing Australian dollar liquidity and squaring off positions in the currency, this was the first step.

Now what are the other steps that can be undertaken? There is a plethora of case studies. In the case of Thailand, in March 2008 the Bank of Thailand lifted the unremunerated reserve requirement on short term capital inflows. This represented the near elimination of capital controls that were imposed in December 2006 and paved the way for convergence between the onshore and offshore baht market.