LEVERAGED foreign exchange trades reached as high as US$800 million in a day, allowed by former Bank Negara Malaysia (BNM) assistant governor Nor Mohamed Yakcop, an inquiry into the central bank’s losses in the early 1990s heard today.

A former BNM forex dealer, Fizaman Noor Mohammad Nasir, 53, told the royal commission of inquiry (RCI) today that the bank’s dealers were only allowed to trade up to US$30 million per session.

However, he said the limit was lifted by Nor Mohamed, who had no trading upper limit because of his position as management. 

“I once received instructions to carry out trades that were that high. And I carried out the instructions,” he said. 

“I did not have the right to say ‘no’ (to Nor Mohamed’s request).”

Nor Mohamed was a manager of BNM’s banking department in connection with foreign exchange (forex) trading in the 1980s and also BNM adviser on forex trading from 1991 to 1993.

He was later appointed as second finance minister in 2004.

Fizaman, who was a dealer with BNM from 1989 to 1998, said he was not sure of the daily overnight trading limit for the chief forex dealer. 

“As a forex dealer, I have never traded more than the fixed amount given to me. 

“The transactions for those in management positions were done by the chief dealer and also the dealers at that time, or they only answer calls from significant parties. In this case, it was Nor Mohamed Yakcop only.

“We as dealers just carry out the trading orders given by Tan Sri Nor Mohamed Yakcop,” he said.

For the dealer position, Fizaman said in his witness statement, transactions are recorded on a blotter and given to the chief dealer to be signed.

The blotter would then be filed, under the name of the respective dealers, Fizaman said. 

As for those in the management position, transactions are recorded in a blotter and filed under management, he said.

“The file then is given to Nor Mohamed by the chief dealer to be signed when the chief dealer is called up to meet him (Nor Mohamed) or when (Nor Mohamed) goes to the dealing room.

“I do not remember as a dealer, (whether) we signed on the blotter or not. However, the chief dealer does sign on it.”

Other than notes on the blotter, dealers also key in the transactions into the computer, which is called the “Tantus system”, Fizaman said. 

“Overall, based on my observations of the management position blotters, I am of the opinion that Bank Negara Malaysia did not profit from the forex trading. As for my dealer position, there were profits recorded but in a small amount.

“I don’t know how much losses Bank Negara suffered in the 1980s and from 1990 to 1994.” – August 24, 2017.