KUALA LUMPUR: Malaysia’s development was greatly impacted by the losses incurred through Bank Negara Malaysia’s (BNM) foreign exchange (forex) trading between 1992 and 1994.
The Royal Commission of Inquiry (RCI) into the losses found that the losses had a significantly bad impact on the economy as it deprived the country of opportunities for growth.
“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 today
The report confirmed that the central bank incurred losses amounting to RM31.5 billion due to the trading between 1992 and 1994.
"BNM's report entitled Accounting Treatment of Losses Arising from Active Reserve Management 1988-1994 (Accounting Treatment Report) stated clearly 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,” added the report.
The losses were consistent with the figures referred to 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, pertaining to an investigation into BNM's forex losses amounting to RM12.35bil in 1992.
A letter by the Auditor General also 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. --Reporting by VEENA BABULAL, FERNANDO FONG and ARFA YUNUS.