“We would not do anything that would undermine such an important institution like the central bank”
KUALA LUMPUR, June 24 — Bank Negara Malaysia (BNM) is a reputable financial institution and the Special Task Force (STF) formed to investigate the foreign exchange (forex) losses incurred in the 1980s and 1990s is not, in any way, to undermine it, but only to bring closure to the issue.
“I must say BNM is a very good institution not only in Malaysia but it is respected internationally and there is something that is very positive for us.
“It’s not the intention of the task force to undermine that. In fact, we are proud about that (Bank Negara Malaysia’s achievement),” said former chief secretary Tan Sri Mohd Sidek Hassan in an interview with selective media on Friday.
He was asked to comment on Former BNM Governor Tan Sri Zeti Akhtar Aziz’s remark on the issue recently that the central bank has since put in place the necessary measures to ensure the 1980s and 1990s incidents would never repeat.
Zeti took over as Central Bank Governor in 2000. In 2009, Global Finance Magazine named her as one of the world’s best central bank Chief. She retired last year.
Sidek said the STF comprised members of the society, for example, Chairman of the Securities Commission, Tan Sri Ranjit Ajit Singh.
“We would not do anything that would undermine such an important institution like the central bank,” he added.
On Jan 26, former central bank governor Datuk Abdul Murad Khalid revealed that BNM suffered US$10 billion in forex market losses in the early 1990s, much higher than the RM9 billion disclosed by BNM.
This prompted the establishment of a seven-member STF in February, helmed by Sidek.
The preliminary findings of the STF showed that the actual losses were greater than what was reported to the Cabinet and Parliament at the time.
It has found that a prima facie case existed to merit in-depth investigations by forming a Royal Commission of Inquiry (RCI), which the government has agreed to.
Asked on the need to investigate on something that happened about two decades ago, Sidek said although it occured a long time ago, the actual losses were only recently disclosed.
“I am of the opinion that the public ought to be given an explanation on the matter and the government has decided that investigations must be carried out.
“As such, the RCI is the only way out to get to the bottom of the matter.
“If we don’t carry out investigations now, it will continue to be raised from time to time. In future, five or ten years down the line, the issue will resurface and be raised again,” said Sidek, adding that a full investigation (through RCI) could bring closure to this episode.