PUTRAJAYA: A former Bank Negara Malaysia (BNM) assistant governor, who was directly involved in forex trading, told a Royal Commission of Inquiry (RCI) that he did not discuss the matter with Dr Mahathir Mohamad and two finance ministers during 1986 and 1993.
Nor Mohamed Yakcop said he did not discuss the forex trading conducted by the central bank with Daim Zainuddin or Anwar Ibrahim.
Daim was finance minister from 1986 to 1991 while Anwar succeeded him and held the post until 1998.
The forex losses, said to be in the region of RM30.5 billion, happened when Mahathir was prime minister.
Nor Mohamed, a key witness to the financial scandal, is now testifying before a five-man RCI chaired by Mohd Sidek Hassan.
The RCI was set up by the government to investigate the forex losses and identify those responsible for it.
The witness, who was also adviser to the central bank, told the RCI that the bitter lesson learnt from the forex trading and other incidents became crucial when the knowledge gained was used to formulate policies to defend Malaysia against currency speculators who attacked the ringgit in the 1997/1998 Asian Financial Crisis.
“It saved the nation hundreds of billions of ringgit that otherwise would have been lost,” he said in reading his witness statement.
He said the forex losses happened and there was no denying it.
“There is also no denying my accountability for the forex losses. I accept my fair share of the responsibility and resigned from BNM,” he said.
Nor Mohamed said at that time it appeared to him a sad end “to my 25 years of service to the nation, through BNM.”
“However, with the grace of Allah SWT, I was given the opportunity in 1997/1998 to contribute to King and country during the financial crisis,” he said.
He said the experience in the forex unit at BNM during those years proved extremely useful later on in saving Malaysia from the devastating effect of the financial crisis.
Nor Mohamed said many Malaysian companies would have become bankrupt with large scale unemployment and poverty spreading all over the country.
“The political stability and socio-economic framework of the nation would have been destroyed,” he said, adding that disaster was averted due to unorthodox measures adopted in September 1998.
Due to the forex losses, Nor Mohamed resigned from the BNM in 1994.
He returned to BNM in 1998 and served until April 2000 and also became economic adviser to the government (May 2000 to December 2003) and Minister (2004 to 2013).
Nor Mohamed is credited with having advised Mahathir to peg the ringgit at RM3.80 to one US dollar to prevent further speculation on the local currency.