‘IT AFFECTED OUR ECONOMY’
Forex losses deprived country of growth opportunities, says RCI
MALAYSIA’S development was greatly impacted by Bank Negara Malaysia’s (BNM) foreign exchange (forex) losses between 1992 and 1994.
The Royal Commission of Inquiry (RCI) found that the losses had a significant impact on the economy as it deprived the country of growth opportunities.
“It also impaired Bank Negara’s ability to fulfil its mandated role as the country’s central bank,” said the report on the RCI findings, which was tabled in Dewan Rakyat yesterday.
The report confirmed that the central bank incurred RM31.5 billion in forex losses between 1992 and 1994.
“BNM’s report titled ‘Accounting Treatment of Losses Arising from Active Reserve Management 1988-1994 (Accounting Treatment Report)’ clearly stated that losses of RM31.5 billion were incurred from 1992 to 1994 through forex dealings.
“As this internal compilation dated April 18, 2007 was based on formal records of the bank, the commission has no doubt about the report’s accuracy.”
The figures are consistent with the ones in the Audit Report on Foreign Exchange Operation Division of Banking Department and Processing Section of Accounts Department as at Dec 31, 1992 dated Jan 21, 1994, relating to a probe into BNM’s forex losses of RM12.35bil in 1992.
A letter by the auditor general specified a loss of RM15.29bil for 1993 and the 438th BNM’s board minutes dated Feb 15, 1995 reported a loss of RM3.86bil for 1994. Additional reporting by Arfa Yunus