BNM forex scandal: Cabinet agrees to setting up of special task force

The Cabinet today agreed to set up a task force to carry out preliminary investigations into the losses involving foreign currency transactions by Bank Negara Malaysia (BNM) in the 1990s.

According to a statement by the Prime Minister’s Office on its Facebook account, the task force will comprise various government agencies, including individuals who are respected and experienced in their respective areas.

“The establishment of this task force is the first step to get all the relevant facts – to analyse all official Hansard of Parliamentary proceedings at the time, minutes of the Cabinet meeting, Auditor General's report, Bank Negara Malaysia report and reports from other agencies concerned.

“It also aims to find out what actually happened, the actual losses and whether there was any procedural and financial administration misconduct and the subsequent cover ups,” it said.

The statement added that the task force will then provide recommendations and suggestions for consideration by the Cabinet, including the establishment of the Royal Commission of Inquiry (RCI), if necessary, based on the results of the investigations.

“This proves the commitment and transparency of the government to ensure the central bank’s activities then were carried out accordingly,” the statement said.

The issue came about following an allegation by former assistant governor Datuk Abdul Murad who said that the central bank had from 1991 until 1993 involved in high-risk speculative forex trading, resulting in a loss that was bigger than the amount reported.

The expose led to calls by certain quarters for the government to set up a Royal Commission of Inquiry to investigate the loss of US$10 billion incurred by BNM through forex trading in the said period during the premiership of Tun Dr Mahathir Mohamad.