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Johari rebuts Dr M's 'reckless' claims about Najib-era BNM losses
Published:  Dec 19, 2017 5:58 PM
Updated: 10:51 AM

Second Finance Minister Johari Abdul Ghani has refuted former premier Dr Mahathir Mohamad's "reckless" claims that Bank Negara (BNM) lost more money under Prime Minister Najib Abdul Razak compared to when he led the country.

Johari said the US$39.6 billion "losses" between 2013 and 2015 were not due to mismanagement of the country's international reserves as claimed by the former premier.

He said the decline in reserves also did not impact the Malaysian economy.

"The so-called US$39.6 billion loss as alleged was actually an amount that reflected the decline in international reserves due to outflows of foreign funds from Malaysia and not losses due to forex trading.

"These outflows were due to concerns over weak global growth prospects, the anticipation of monetary policy normalisation in the US and the sharp decline in global oil prices.

"During this period, capital outflows were not only unique to Malaysia but also affected other emerging markets including Indonesia, Philippines, Singapore, Thailand, India, China, South Korea and Taiwan," Johari said in a statement today.

Mahathir (photo) had made the allegations of mismanagement in a Facebook video on Dec 10.

He questioned why there were no investigations on this, such as the Royal Commission of Inquiry on Bank Negara's forex losses in the 1990s.

Johari, who is also Titiwangsa MP, said the external factors he cited pushed foreign investors to liquidate their investments in Malaysia's stock and bond markets, and repatriate it as US dollars.

While this led to greater demands for the greenback against the ringgit, Johari said it was in no way similar to the Mahathir-era forex trading activities.

"Given our solid fundamentals, the decline in reserves during the period 2013-2015 had no material impact (on) the functioning of the Malaysian economy as well as the financial position of the central bank.

"Since then, Malaysia’s international reserves have been on the increase. As at end November 2017, our international reserves stood at US$101.9 billion and is sufficient to support 7.5 months of retained imports.

"The current amount of reserves is five times larger than the US$21.7 billion recorded in 1997 which can only support 3.4 months of retained imports," he added.

Johari said Mahathir's claims were reckless and sought to undermine BNM.

He urged Malaysians not to fall for the former premier's "ruse" and stay united to generate a robust and sustainable economy for the benefit of future generations.

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