Malaysia picks new central bank chief

KUALA LUMPUR — Malaysia named its new central bank governor on Friday, choosing a woman who had been a former deputy governor assisting investigations into the 1MDB scandal, and who has most recently held a senior role at the International Monetary Fund.

Nor Shamsiah Mohd Yunus will become the second woman to hold the position in the Muslimmajority country when she takes up her post at Bank Negara Malaysia on July 1.

Her predecessor Muhammad Ibrahim resigned on June 6, less than halfway through his fiveyear term, quitting just weeks after Najib Razak, the prime minister who appointed him, lost an election.

Mr. Muhammad was seen as a casualty of a fallout from the scandal at 1Malaysia Development Bhd (1MDB), the state fund whose multi-billion dollar losses are being investigated by the new government led by 92-year- old Mahathir Mohamad.

The new government has replaced several other senior officials seen as close to Mr. Najib’s administration.

Nor Shamsiah, who served as assistant director of the International Monetary Fund’s monetary and capital markets division, told a news conference she would keep Bank Negara’s focus on “maintaining monetary and financial stability.”

She had left the bank shortly after Mr. Muhammad’s appointment in 2016, having served with him as one of the deputy governors under Zeti Akhtar Aziz, who became one of the best known female central bankers during her 16-year stint.

Ms. Zeti, who is a member of a Council of Eminent Persons appointed by Mahathir to advise the new government, gave Nor Shamsiah a ringing endorsement.

“She is experienced and she will hit the ground running,” Ms. Zeti told journalists, the Malay Mail reported.

“By appointing her, the government has demonstrated its respect for the institution and I think this is what the market wants to see, an institution that remains independent in performing its function,” Ms. Zeti was quoted as saying.

The new governor takes over at a time when there are uncertainties over the economic policies of Mr. Mahathir’s administration, which effectively scrapped a consumption tax and introduced fuel subsidies within a month of assuming power.

Foreign investors have pulled out of Malaysian equities and ratings agencies have expressed concerns over the country’s fiscal strength.

“Nor Shamsiah’s appointment implies continuity in the direction and conduct of monetary policy,” analysts at Nomura said.

The appointment, and comments on the ringgit by Mahathir earlier today, resulted in the ringgit strengthening 0.32% marking it the largest intraday rise since March 28.

CONTINUITY

Nor Shamsiah joined Bank Negara Malaysia (BNM) in 1987 after getting an accounting degree from the University of South Australia, and was a deputy to Ms. Zeti from 2010 to 2016.

She left the central bank when her second term ended in November 2016, shortly after the end of Ms. Zeti’s term.

Nor Shamsiah has extensive experience in the development of prudential regulation, legislation, policies and guidelines for the financial sector. The central bank also said she was involved in the financial sector resolution initiatives during the 1997- 98 Asian financial crisis.

She assisted with the 1MDB investigation when Ms. Zeti was in charge. —