This article first appeared in The Edge Financial Daily, on April 28, 2016.

It is undoubtedly a big relief for many Malaysians, particularly those in the financial and banking industries, that the Prime Minister’s Office has announced the appointment of the deputy governor of Bank Negara Malaysia (BNM) Datuk Muhammad Ibrahim to succeed Tan Sri Dr Zeti Akhtar Aziz as the central bank’s governor.

That is reflected in the many messages welcoming the government’s choice of candidate for the high-powered position, who will dictate the country’s monetary policy, the structure of the banking system as well as the rules and regulations that govern the financial industry, among other things.

An internal appointment implies a higher possibility of continuity in the central bank’s direction.

In a statement, Zeti said that the appointment of Muhammad is “definitely positive for the country”. “Being part of our policy team at BNM will provide continuity and the much needed certainty in this prevailing period of great uncertainty,” Zeti noted.

Zeti, who retires at month-end, was appointed the acting governor on Sept 1, 1998, at the peak of the Asian financial crisis. Capital flight, probably the most severe in Malaysian history, the implementation of controversial capital controls, a sharp depreciation of the ringgit, a bloodbath in the equity market (then known as the Kuala Lumpur Stock Exchange), a liquidity crunch that lifted the base lending rate to double digits — these were the problems that greeted Zeti when she took the helm. One may recall how challenging her job was then.

Nonetheless, she has managed to sail through the perfect storm in the pitch dark night.

Is the timing of her deputy’s succession any better?

No doubt, the country is definitely not in the scenario that was playing out in 1998. But, like it or not, Malaysia is in a period of uncertainty on many fronts. Some quarters may opine that 1Malaysia Development Bhd’s (1MDB) borrowings are just a small fraction of the country’s economy. However, no one can deny that the controversies surrounding 1MDB have affected the country’s sovereign rating. The international probes into possible money laundering in 1MDB do not speak well about Malaysia either. The curbing of money laundering is an area under the purview of BNM.

On the economic front, the external headwinds add uncertainties to the country’s economy, which is experiencing the detrimental effects of a weak local currency once again after 1998.

High household debts, soft consumer spending, a weak and vulnerable local currency, the impact of a prudent lending policy on the slowing property market — these are some thorny problems that Muhammad will inherit. However, these challenges are not new to him, as he has worked in the central bank since 1984. As the governor, he now needs to make the judgement calls on what policies to continue and which measures to remove.

Over the years, upholding BNM’s independence has earned Zeti respect at home and abroad.

Congratulations, Datuk Muhammad. BNM’s independence is in your hands now.