Putrajaya has appointed Muhammad Ibrahim as the new governor of Bank Negara Malaysia, after months of market speculation and uncertainty ahead of the retirement of longstanding head Zeti Akhtar Aziz.
Muhammad, 56, who is currently a deputy governor, would take over effective May 1, according to a statement from the Prime Minister's Office.
"I am confident that under Muhammad's leadership, Bank Negara Malaysia can continue its service in helping the government, providing advice and views for catalysing the country's economic growth, as well as administer monetary policy and overseeing the country's financial industry, including continuing Bank Negara's efforts to grow the financial industry," Prime Minister Najib Abdul Razak said in the statement.
"On behalf of the governemnt, I would like to express gratitude and appreciation to (Tan Sri Dr) Zeti Akhtar Aziz for her excellent contributions during her tenure as the seventh governor of the central bank," Najib added.
Muhammad is a member of the central bank's monetary policy committee and sits as an independent director on the board of national oil firm Petronas.
The ringgit turned firmer after the announcement.
Muhammad has a tough task ahead, with slumping oil and commodity prices dragging on the economy and a simmering political scandal at home that has worried global investors.
He will chair his first policy meeting on May 19. His first public appearance will be when first quarter growth figures are announced on May 13.
After Zeti's steady hand on the tiller for 16 years, businesses and investors will be looking for policy continuity and assurances about the central bank's independence.
So far this year, Malaysia's currency and bond markets have enjoyed a degree of calm after being battered in 2015 by worries about the impact of tumbling energy prices on the government's finances and political uncertainty.
The ringgit lost nearly 19 percent against the US dollar last year.
Zeti, 68, who steps down on April 30, was named as one of the world's best central bank chiefs by Global Finance magazine in 2009.
Muhammad was seen as one of the favourites to take over from Zeti, having been one of her deputies since 2010.
During a career spanning 32 years with the central bank, Muhammad held a key role during the Asian financial crisis as managing director of Danamodal Nasional Berhad, a bank recapitalisation agency.
The new governor is a member of the central bank's monetary policy committee and is an independent director on the board of national oil firm Petronas.
A chartered accountant and University of Malaya graduate, he holds a master's degree from Harvard University and a postgraduate diploma in Islamic banking and finance from the International Islamic University Malaysia.
South-East Asia's third-largest economy grew five percent in 2015, slowing from six percent in 2014. In January, Najib revised the 2016 budget to reflect sharply lower oil prices and cut this year's GDP forecast to 4.0-4.5 percent from 4.0-5.0 percent.