Tun Ismail Ali bumped into Jaffar Hussein at the airport back in the early 1990s and the former asked the latter about the US$10 billion Forex loss. Jaffar told Ismail that the situation was very bad and that the instructions to play the Forex market, and then to cover up the disaster after that, actually came from Tun Daim Zainuddin himself and that Tun Dr Mahathir was very much in the loop.
Raja Petra Kamarudin
The most interesting thing about this investigation is that finally we are being told that Tun Daim Zainuddin was the key person behind the whole disaster. The one-time Bank Negara Governor Tun Ismail Ali bumped into the one-time Bank Negara Governor Jaffar Hussein (both who died in 1998) at the airport back in the early 1990s and the former asked the latter how bad was the whole situation. Jaffar told Ismail the situation was very bad and that the instructions to play the Forex market, and then to cover up the disaster after that, actually came from Tun Daim Zainuddin himself and that Mahathir was very much in the loop.
Source : Malaysia Today
The Special Task Force on the Bank Negara Malaysia (BNM) forex trading in the late 80s to the early 90s recommended further investigation through a Royal Commission of Inquiry (RCI).
In his statement, the chairman, Tan Sri Sidek Hasan said there was a prima facie case for it and the losses were more than that disclosed. An RCI with access to documents can do a better job.
A former BNM governor might have got sacked for being honest and vocal.
The aftermath of the loss has bigger implication. Several months ago, there was news that Murad mentioned that the country’s foreign reserve might have been wiped out. It means that there was no security blanket to cover for months of import without export.
The estimated loss thus far was on average of RM4 billion a year of trading. It means BNM had no system of control and recklessly continued to gamble despite losses piling up! Why and who gave Nor Yakcop such unlimited authority?
The currency crisis led to a massive economic crisis and contributed to hardship to the rakyat and country for many years.
Big businesses failed and the banking industry had to be restructured to avert collapse.
Source : The Mole
I was not informed of BNM’s forex trading policy changes in 1980s, Tun Daim says
Former finance minister Tun Abdul Daim Haji Zainuddin told the Royal Commission of Inquiry (RCI) that he was not aware of any policy changes by Bank Negara Malaysia (BNM) with regards to its approach to foreign exchange (forex) trading after 1985.
“I was not informed by the bank of any changes in policy [regarding forex trading which caused RM9.5 billion losses during the time of the Plaza Accord]. Everything was [kept] secret,” said the former finance minister from 1984 to 1991 when testifying at the RCI into the scandal here today.
He added that BNM is “fiercely independent” of the government and should not be instructed on how to handle its trading activities.
“I was not aware of any changes because it was not brought to my attention by the central bank,” said Daim, adding that the onus was on BNM to inform the Ministry of any changes in policy.
The Plaza Accord was an agreement made between France, West Germany, US, UK and Japan in September 1985, with the aim of intervening in currency markets to depreciate the US dollar against the Japanese yen and German Deutsche mark.
At a previous RCI hearing, former manager of BNM’s Banking Department Tan Sri Nor Mohamed Yakcop had said that the Plaza Accord was “historic” as it was the first time that central bankers agreed to intervene in the currency market and the first time that governments set target foreign exchange rates which were to be achieved through active intervention.
Following this paradigm shift in central banks’ approach to forex trading, BNM had allegedly also changed its approach towards forex trading, switching from a conservative approach to more aggressive approach after 1985, a move which was allegedly focused on maximising profit from trading.
Source : The Edge
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