Bank Negara’s Forex Scandal Possibly Cost Malaysia RM100B

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Our country would have had RM100 billion more in its foreign reserves if not for the foreign exchange (forex) losses scandal that happened more than two decades ago, according to Datuk Abdul Murad Khalid.


The former Bank Negara Malaysia (BNM) assistant governor, whose allegations that BNM squandered more than US$10 billion (RM42.8 billion) prompted renewed examination of the scandal this year, based this on the opportunity cost of losing the alleged amount.

Datuk Abdul Murad Khalid said the sum would have been accumulated over a 25-year period if not for the forex losses.

“We lost RM4 billion in income annually because of the scandal,” Murad said.

“The total losses then were US$10 billion, which is equivalent to about RM40 billion today.

“The money would have increased to US$26.66 billion, or more than RM100 billion, if it had been kept in government savings, calculated at four per cent compound interest annually,” he told the New Straits Times yesterday.

“But, all that money has gone down the drain,” he added.

Murad said the announced Royal Commission of Inquiry (RCI) must proceed and should not be seen as a political move as it would help the truth prevail.

According to Murad, the RCI would be the best solution in bringing the scandal to a closure as it could call for witnesses to testify under oath.

“The RCI must investigate to see if there are elements of crime in the forex losses,” he said.

He added that it was never too late to look into the scandal as the matter was kept under wraps back then.

The New Straits Times reported that Anwar, who gave his statement to the STF in April, claimed that the then central bank governor, the late Tan Sri Jaafar Hussein, had admitted to him that former BNM assistant governor Tan Sri Nor Mohamed Yakcop was identified as the officer responsible.

The Prime Minister’s Office announced the RCI on Jun 21, saying the Special Task Force (STF) recommended its formation after concluding there was sufficient evidence to merit further investigation.

Formed in February, the STF found that actual losses were greater than what was previously disclosed to former ministers and Parliament.

It also concluded misleading information pertaining to the facts of the case had been presented to ministers and lawmakers previously.