PUTRAJAYA, Sept 6 — Bank Negara Malaysia (BNM) paid a steep price for trading in foreign currencies in the early 1990s, but the losses helped it save “billions of ringgit” later during the 1997 Asian financial crisis, Tan Sri Nor Mohamed Yackop said today.
The former central bank assistant governor, often cited as a key player in the forex currency trading activities, was called to testify before the Royal Commission of Inquiry (RCI) today.
He admitted that BNM had “misread the market” and took “full accountability” for the losses.
“That lesson proved crucial in helping formulate policies to defend the country against the currency attacks in the 1997/1998 Asian Financial Crisis, saving the nation hundreds of billions of ringgit that would otherwise have been lost,” he said.
"The forex losses happened. There is no denying it. There is also no denying my accountability in the forex losses," he said.
Nor Mohamed said accepting accountability for the losses was the reason for his resignation from BNM, but claimed the experience proved useful when it helped the country through the 1997/1998 Asian Financial crisis.
He asserted that the unorthodox measure taken in September 1998, which allowed the country to navigate through the crisis without borrowing from the International Monetary Fund (IMF), was down to experience gained at the forex desk of BNM.
Nor Mohamed also said that he had never traded currencies personally in all the years overseeing the operations, and that all transactions were made by his underlings.
