BNM did not brief me regularly, says Dr Mahathir

Bede Hong

Dr Mahathir Mohamad says whatever foreign exchange dealings done by BNM, they are according to what it believes to be in the national interests. – The Malaysian Insight pic by Kamal Ariffin, September 18, 2017.

DR Mahathir Mohamad told the inquiry on Bank Negara Malaysia’s forex losses today that he never received regular briefings from the central bank during the period of the forex losses in the early 1990s, nor did he interfere with its management. 

“I have also stated from BNM’s annual financial report, which were presented in Parliament, whatever foreign exchange dealings that were done by BNM… (are) according to what BNM believed to be the best interest to present the national reserves and the value of the national currency.

“However, the detailed daily handling of the foreign exchange dealings was never made known to me on a regular basis as BNM is not legally responsible to report to me, and I do not have responsibility to interfere with the exclusive administration of BNM,” he said in his written testimony to the RCI.

The RCI is focussed on the forex losses suffered by the central bank, in particular from 1992 to 1994. 

Dr Mahathir was prime minister from 1981 to 2003, while Anwar was finance minister from 1991 until his sacking in 1998. 

“As far as I know, when I was prime minister, Bank Negara ran its operation independently as a corporate body under the Central Bank of Malaysia Ordinance 1958 and had its own administrative structure and was led by the governor,” Dr Mahathir said.  

He said the central bank governor has a responsibility to report to BNM’s board of directors. 

“I, as a prime minister, never interfered in the management and administration of Bank Negara Malaysia at all and I believe that I didn’t have the legal authority to interfere in terms of policy, management and administration of BNM.

“However, this does not mean that the governor of BNM and I never spoke in general terms on the institution of BNM. But those were general conversation without the details in connection with many activities related to Bank Negara.”

Dr Mahathir said BNM was required to present an annual financial report, audited by the auditor-general and then handed over to the Ministry of Finance to be presented in Parliament. 

At the RCI hearing today, another witness, former finance minister Daim Zainuddin, also said BNM was not obliged to report to him on its activities and only had to keep him informed. 

Daim said if the bank chose not to inform him of things, there was nothing he could do. – September 18, 2017.

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