Bank Negara Governor Offered to Resign

1382
- Advertisement -

BNM declines to comment on market talk of governor’s resignation.

Malaysia’s central bank Governor Tan Sri Muhammad Ibrahim offered to resign from his post two years into his term, according to people familiar with the matter, who declined to be identified because the discussions are confidential.

Saw Siow Feng

The move comes less than a month after Prime Minister Tun Dr Mahathir Mohamad won a surprise election victory and his newly installed Finance Minister, Lim Guan Eng, raised questions about the central bank’s purchase of land from the previous administration.

It’s unclear what the government’s response was to his resignation offer. A spokesperson for the central bank declined today to comment on whether the governor had offered to resign. An official at the Finance Ministry also declined to comment. Muhammad didn’t respond to several calls and text messages to his mobile phone and office.

Lim said in May that the previous administration of Datuk Seri Najib Razak had used money raised from a land sale to the central bank – valued at about US$520 million (RM2 billion) – to pay off some of the debts of 1MDB, the state investment fund that’s been mired in a corruption scandal.

Bank Negara Malaysia has said the purchase was transacted at fair value and complied with all governance requirements and relevant laws.

Muhammad was promoted to lead the central bank for a five-year term in May 2016 when Tan Sri Zeti Akhtar Aziz – who was appointed by Dr Mahathir – stepped down after 16 years of leadership. He had risen through the ranks of the central bank since joining it in 1984 and was endorsed by Zeti when she left as a successor able to provide policy stability.

Born in 1960 and with a master’s degree from Harvard University, Muhammad has had to navigate volatile financial markets since he took the helm at Bank Negara Malaysia. He cut interest rates in a surprise move shortly after taking office and implemented curbs on some foreign-exchange trading that has drawn criticism from currency traders.

The economy has rebounded since then, with the currency among the top performers in emerging markets globally this year.