I accepted my fair share of accountability for BNM forex losses, says Nor Mohamed

By BERNAMA / Pic by MUHD AMIN NAHARUL

Former Bank Negara Malaysia (BNM) advisor Tan Sri Nor Mohamed Yakcop (picture) yesterday conceded that the central bank suffered foreign-exchange (forex) losses in 1986 to 1993.

He said it was a mistake that provided a bitter lesson for BNM. The lesson proved crucial in helping formulate policies to defend the country against the currency attacks during the 1997/1998 Asian financial crisis, saving the nation hundreds of billions of ringgit that would otherwise have been lost, he said.

Nor Mohamed — 70, who joined BNM in September 1968 and promoted to the post of manager, Banking Department, two years later — said he did not, at any time between 1986 and 1993, discuss with the Finance Minister and then Prime Minister Tun Dr Mahathir Mohamed about the central bank’s forex transactions. However, he could not remember the losses and profits in the forex transactions by BNM during that period.

“There is no denying it. There is also no denying my accountability for the forex losses. I accepted my fair share of the accountability for the forex losses and resigned from BNM.

“At that time, it appeared to be a sad end to my 25 years of service to the nation through BNM,” he said in his witness statement on the fifth day of the Royal Commission of Inquiry to investigate BNM’s forex losses in the early 1990s.

Nor Mohamed, who is the 17th witness, said the important point was that the experience in the forex unit those years proved extremely useful later in saving Malaysia from the devastating effects of the financial crisis in 1997/1998.

“It was an accident waiting to happen. It did not happen because of the unorthodox measures of September 1998, which in turn was conceived and implemented based on the knowledge, skills and experience acquired at the forex desk at BNM,” he said.