FOREX RCI | A former Bank Negara internal auditor refuted the central bank's former assistant governor Abdul Murad Khalid, who claimed there was no investigation into the foreign exchange losses incurred in the 1990s.

Wong Yew Sen, who was with the central bank since 1971 until his retirement in 2003, said checks showed there was a committee formed to monitor forex activities, which was the external reserves committee.

However, he noted that the limit allowed for forex activities for management deals was not stated.

Citing audits conducted, Wong, who was the fourth witness to testify in the Royal Commission of Inquiry (RCI) hearing into the forex losses, said the limit accorded to individual dealers was US$125 million.

"They could make a decision whether to undertake a dealing or not. For chief dealers and management deals, the limit allowed was not stated," he added.

Earlier this year, Murad claimed that the central bank lost US$10 billion in the foreign exchange market. He also claimed that nobody was investigated for the "biggest loss in the world”.

Sharing the inner workings of Bank Negara's forex operations, Murad claimed there was no proper documentation of the huge transactions.

Only a top central banker and a junior staff had records of all the deals, he had claimed.

Check and balance

However, Wong said an audit done in 1992 showed that forex transactions in 1992 recorded losses amounting to RM8.5 billion.

He also noted that Bank Negara had a written policy in relation to forex dealings, but it was not comprehensive.

Wong said while a check and balance system in relation to forex dealings existed, it was limited to dealers.

"It wasn't stated clearly for deputy managers and management deals.

"I am also unsure whether adjustments were made to Bank Negara's yearly financial statements to cover up Bank Negara's losses in forex dealings.

"The audit's objective was not to find out the total amount of losses incurred," Wong added.

The RCI is expected to complete its inquiry within three months from the date of its setting up on July 15 and thereafter submit its report to the Yang di-Pertuan Agong.

It has been tasked with determining the veracity of allegations surrounding the forex losses incurred by Bank Negara and its implications on the national economy, among others.