FOREX RCI | Former Bank Negara deputy governor Lin See Yan said he was never asked to discuss the foreign exchange losses incurred by the central bank with then prime minister Dr Mahathir Mohamad.

"At any point in time, I was not asked to discuss the forex losses incurred by Bank Negara with the prime minister," Lin told the Royal Commission of Inquiry (RCI) investigating the forex losses today.

However, he said he was not aware if anyone else had informed the prime minister about the matter.

The former deputy governor also told the RCI that he was once called by then finance minister Anwar Ibrahim after he had spoken to the then Bank Negara governor Jaffar Hussein.

The witness testified that, at the time, Jaffar said he had already discussed the matter with the finance minister.

"I can't remember the exact date I discussed with the minister.

"(But) Anwar was most unhappy that the losses occurred and agreed with me that whatever open positions that still exist should be closed as soon as possible," Lin said.

Meanwhile, Lin confirmed that former Bank Negara advisor Nor Mohamed Yakcop was then the chief dealer and had reported directly to the governor.

Lin said he was first informed about the losses by the former bank special assistant to the governor, Lee Siew Kuan.

He also said he was then informed about the losses from "friends from the International Monetary Fund (IMF)".

"They told me 'we know you have made open positions and you have made big losses, please stop it'."

Both Lin and Lee then went to see Jaffar whom Lin said had confirmed the losses.

"We asked how big the losses were, he said he was not sure."

Jaffar, said Lin, had then agreed that Lim, with the help of former Bank Negara assistant governor Abdul Murad Khalid, were to then carry out preliminary investigations immediately.

The investigations then had found that Bank Negara had large open forward positions in multiple currencies which meant that the bank would suffer more losses.

"As a central banker, (for me) the risk was not acceptable," said Lin.

Telling Jaffar that Nor Mohamed should not be allowed to deal anymore and that Murad, instead, should take over, Lin recalled Jaffar's parting words:"I got the bank into this mess, I will fix it".

Comparing himself with Jaffar, Lin admitted that he was "too conservative" even for a central banker.

"As a (former) commercial banker, Jaffar seized opportunities that maybe the central bank found was too conservative."

Nevertheless, Jaffar, he said, was an "honourable man" and well-intentioned.

"(But) he was too trusting (of the forex dealers).

"I think he let his guard down. As a result, he wasn't fully aware of what was going on."

Meanwhile, RCI chairperson Mohd Sidek Hassan questioned how it was possible that the top officers in Bank Negara did not know anything about the losses and said that he was told that Jaffar was actually conservative in nature.

"Even (while working) in a commercial bank he was conservative. When he became a central banker he should be more conservative but he allowed it to happen," said Sidek.

Lin replied by stating that Jaffar was only reported about the profits made at the time.

"He was very happy [...] I told him that's not how we operate but he told me 'I know what I'm doing.

"For some reason, I can't fully explain, all I know was that only profits were reported to him so he became very buoyant," said Lin.