KUALA LUMPUR, Aug 19 — Bank Negara Malaysia (BNM) must remain free of political influence and be allowed to execute its duties professionally, a group of Malay ex-civil servants said amid rumours of pressure on the central bank’s governor.
Citing economic uncertainty fuelled by the declining ringgit as well as the 1Malaysia Development Berhad (1MDB) scandal, the so-called G25 urged the federal government not to cast aspersions on BNM officials as well as those among the country’s vital institutions.
The group pointed out that confidence in BNM's ability to carry out its duties has been the most important factor contributing to investor confidence and economic development for Malaysia, as speculation remains that Tan Sri Zeti Akhtar Aziz may be forced to leave over an alleged leak of information from an investigation into 1MDB.
“While there were doubts on the independence of the judiciary and capacity of other institutions, the confidence in the strength and capability of Bank Negara Malaysia in steering the financial sector to support economic growth has always been sustained and has been the single most important factor contributing to investor confidence and favourable economic prospects for Malaysia,” the statement read.
“Today, as the country faces an unprecedented test of its governance at the highest level which unfortunately is cascading into an economic downturn and threatening financial stability, only by allowing its key institutions to undertake their functions independently can Malaysia hope to redeem itself and stall the contagion which is emerging from a governance issue into an economic and financial setback,” it added.
The ringgit has lost nearly a fifth of its value versus the US dollar since last year and is currently trading around 4.09 to the greenback, while Malaysia’ gross domestic product slowed to 4.9 per cent in the last quarter — the slowest in two years.
G25 said that the government cannot blame external parties for the economic troubles it is facing and must instead do all it can to ensure that institutions are able to continue to carry out their work.
“Any actions now to cast aspersions on the integrity of Bank Negara Malaysia, its governor and its senior officials will have significant adverse consequences,” the group stressed, adding that principles of good governance were key to the strength and independence of the Central Bank.
“Further, during Governor Zeti’s tenure, the reputation of Bank Negara Malaysia in upholding good governance in the financial sector, as well as building the human capital and technical expertise of the central bank has made Bank Negara Malaysia a role model in many parts of the developing and emerging world,” it said.
Zeti has declared that she intends to see through her term as Bank Negara Malaysia (BNM) governor, and that she expects to remain in charge of the country's central bank until her current term expires in April 2016.
Rumours have been circulating over the past few weeks that Zeti will resign as BNM governor for health reasons.
This was after Tan Sri Abdul Gani Patail was removed unexpectedly as Attorney-General, also over “health reasons”.
Both Zeti and Gani, up to his removal, had been part of a multi-agency special taskforce investigating 1MDB as well as allegations linked to a RM2.6 billion deposit into Prime Minister Datuk Seri Najib Razak’s personal accounts.
The Malaysian Anti-Corruption Commission (MACC) has since said that the deposits were “donations” from the Middle East.
The taskforce has also since been disbanded.