KUALA LUMPUR: Beginning July 1, 2027, the Malaysian Islamic Overnight Rate, or MYOR-i, will become the mandatory reference rate for Islamic financial products, says Datuk Seri Abdul Rasheed Ghaffour.
MYOR-i is currently the world’s first transaction-based Islamic benchmark rate, set to replace the Kuala Lumpur Islamic Reference rate (KLIRR).
The Bank Negara governor said this in his opening speech at the Global Islamic Finance Forum 2025 held at the Sasana Kiang here Monday (Oct 13) which was attended by Prime Minister Datuk Seri Anwar Ibrahim and Islamic finance experts from all around the world.
Abdul Rasheed also said that social purpose and commercial viability must converge and the finance sector must relook at values and systems that once made commerce a conduit for shared prosperity.
“We must look back at the values and systems that once made commerce a conduit for shared prosperity and finance for a force for human progress.
“Over the past three decades, the world economy has been shaped by the forces of globalisation. Between 1990 and 2020 - global trade in goods and services expanded more than fourfold, which has helped lift over a billion people out of extreme poverty.
“Capital flowed more freely; and supply chains stretched across continents; and technological advances reduced barriers that once divided nations. What enabled global trade to flourish then - was not simply commerce, but connectedness - a common vision for integration that transcended borders and beliefs.
“This recent decade, however, has witnessed a reversal or a redrawing of that map. Trade tensions have risen; strategic rivalry weighs on global supply chains; and geopolitical rifts have brought further pressure on global growth. The outlook remains uncertain, with the International Monetary Fund (IMF) projecting a global growth of approximately 3% - and this below the pre-pandemic average,” said Abdul Rasheed.
He called on the Islamic finance industry players to revisit the strength of innovations which lay rooted in the Quranic injunctions on fairness, trust, and mutual benefit.
“In today’s quest for economic stability and inclusive growth, Islamic finance offers practical tools. Durable instruments such as zakat and waqf have long supported communities — strengthening the social fabric of society.
“When economic conditions tighten, zakat also acts as a stabilising force. It channels financial support to the needy, supporting the underpinning of demand in the economy and providing a safety net for those at risk. Similarly, the beauty of waqf lies in its continuity and long-term impact.
"These endowments could be utilised to generate sustainable income streams — often funding education; healthcare; infrastructure; and social welfare,” said Abdul Rasheed.
He said that Bank Negara has lined up developments to finance the Islamic financial ecosystem.
They include re-engineering finance through risk-sharing innovation such as expanding the use of Musharakah and Mudarabah structures with the introduction of i-CITA, backed by RM100 million government funding.
The others include redefining inclusive development through Islamic Social Finance through the expansion of the iTEKAD programme, supported by a RM5 mil government matching grant for takaful protection.
“Malaysia is positioning Islamic finance as the vanguard of two global growth frontiers: first is the halal economy and second is the sustainable finance. These are not niche markets — they are trillion-dollar opportunities waiting to be unlocked.
"Through the MIFC Leadership Council, we have laid strategic groundwork for global connectivity. Stronger execution by industry is now paramount. That is why we are supportive of the formation of the MIFC Business Network or MBN as the next phase of MLC transition.
"MBN, as a coalition of industry champions – will be pertinent in charting our way forward. They will be tasked with deepening sectoral collaboration — securing tangible business outcomes, and scaling impact in Malaysia and beyond.
"I am pleased to announce that nine industry players comprising entities from banking, takaful, capital markets and ancillary services have committed to be the founding members of MBN,” said Abdul Rasheed.
