Malaysiakini published a letter from Ganesh Sahathevan titled “Forex loss: Anwar’s ‘I didn’t know’ claim curious”.
Ganesh has pointed out to Anwar Ibrahim’s memory being … er … somewhat strange. Read his letter that I extracted in full from Malaysiakini:
Ganesh has pointed out to Anwar Ibrahim’s memory being … er … somewhat strange. Read his letter that I extracted in full from Malaysiakini:
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Anwar Ibahim was reported to have told malaysiakini in an exclusive interview: "By the time I got the picture (about Bank Negara's forex trading losses), the problem was huge. We were talking about losses in the range close to US$10 billion." He further claimed that he had no inkling of the forex speculations until he went overseas where friends confronted him over the fact that Bank Negara was among the top three players and was widely considered a rogue bank.
Anwar said: "I knew from a Switzerland friend who told me: 'Look Anwar, Bank Negara's ringgit speculation was huge'. I told him that couldn't be as we needed to protect our reserves. But he told me that you (Bank Negara) were one of the top three. One of the top! I said (it was) impossible that we could be among (the countries) which have billion of dollars to speculate on forex."
He said when the then business editor of the Far Eastern Economic Review also confronted him over the issue later, he decided to seek clarification from Jaffar Hussein, the governor of Bank Negara, who was similarly in the dark."
The above is curious, for even as a university student in the mid-80s, I was aware from media reports that Bank Negara was one of the biggest players on the international forex market. Hence for Anwar to now claim that he was unaware of the fact and only learnt about it (presumably in the early 90s) from ‘a Switzerland friend’ beggars belief. Unless of course, Anwar is now confessing to not having kept abreast of economic issues. Attached below are a number of reports going back as far as 1987, concerning Bank Negara's forex trading activities.
Some excerpts:
Reuters, Aug 24,1989: A Southeast Asian central bank has emerged as an active market player in the currency market and its presence is becoming more noticeable in thin summer trading conditions, dealers said. Big market moves are often attributed to Bank Negara Malaysia.
Reuters, Dec 1, 1989: Monetary authorities in major countries are about to find out what currency dealers in Tokyo already know – Malaysia's Bank Negara can't be pushed around. Jaffar Hussein, the Malaysian central bank governor, said in Kuala Lumpur on Wednesday that Bank Negara will not bow to pressure to check its foreign exchange activity and will do what it sees fit to preserve the value of its reserves.
Reuters, Dec 14, 1989: “They sometimes do a billion in one shot, mostly through US banks in Singapore,” said one dealer at a Tokyo city bank, who estimates his bank does 400-500 million dollars worth of business with Bank Negara on any given day.
In one of the first official reactions to the report, Jaffar said, "We are just a normal player. We are obliged to preserve the value of our RM20 billion reserves. If that is considered a big player then it must be it.” The problem, at least from the point of view of some traders, is exactly that - Bank Negara acts more like a market player than a central bank.
Asian Wall Street Journal, Dec 5, 1989: Bank Negara, Malaysia's central bank, curtailed its speculative activity in the foreign-exchange market following a US Federal Reserve Board request that it do so, according to currency traders and individuals familiar with the US position. Traders said that on some days, the Malaysian central bank would trade as much as between US$1 billion and US$5 billion. Although that is a small amount compared with the currency market's global daily volume of about US$400 billion, it is an enormous amount for a single central bank and a significant portion of Malaysia's about US$6.5 billion in foreign reserves. A central bank normally trades in the foreign-exchange market to influence the exchange rate of its country's currency, to buy other currencies in order to pay overseas obligations, or to occasionally adjust and balance its foreign-exchange reserves. In the case of Bank Negara, however, traders in Tokyo, Singapore and Hong Kong asserted that the bank's activities were aimed at turning a profit.
Asian Wall Street Journal, June 1990: Malaysia's Deputy Finance Minister Loke Yuen Yow said on Monday a small portion of the country's gold reserves were leased to a failed commodity unit of the US Drexel Burnham Lambert Group Inc. But the country expects to recover the gold valued at RM115 million (US$42.6 million dollars) from Drexel Burnham Lambert Trading Corp by 1991 and make a profit of RM16.7 million ringgit in the process, he said.
Asian Wall Street Journal, June 1991: Large buy orders carried the dollar to a 19-month high against the mark on Tuesday, and hopeful remarks on the US economy by Federal Reserve officials kept the currency near its intraday peaks in busy trading. Before May data for US housing starts were announced Tuesday, and ahead of separate appearances before US congressional committees by US Federal Reserve Board Chairman Alan Greenspan and Federal Reserve Board Governor David Mullins, Bank Negara was widely believed to have bought dollars, and possibly yen, for marks.
As the above reports suggest, not only was Bank Negara's forex trading a well-known fact as far back as the late 80s, but Jaffar was an active player, not an innocent party who was caught unawares by Dr Mahathir Mohamad, Nor Mohamed Yakcop and Daim Zainuddin executing trades without his knowledge.
Perhaps Anwar might provide an explanation for the above that clearly contradicts his assertions, but I suppose that would be akin to expecting pigs to fly.
Anwar said: "I knew from a Switzerland friend who told me: 'Look Anwar, Bank Negara's ringgit speculation was huge'. I told him that couldn't be as we needed to protect our reserves. But he told me that you (Bank Negara) were one of the top three. One of the top! I said (it was) impossible that we could be among (the countries) which have billion of dollars to speculate on forex."
He said when the then business editor of the Far Eastern Economic Review also confronted him over the issue later, he decided to seek clarification from Jaffar Hussein, the governor of Bank Negara, who was similarly in the dark."
The above is curious, for even as a university student in the mid-80s, I was aware from media reports that Bank Negara was one of the biggest players on the international forex market. Hence for Anwar to now claim that he was unaware of the fact and only learnt about it (presumably in the early 90s) from ‘a Switzerland friend’ beggars belief. Unless of course, Anwar is now confessing to not having kept abreast of economic issues. Attached below are a number of reports going back as far as 1987, concerning Bank Negara's forex trading activities.
Some excerpts:
Reuters, Aug 24,1989: A Southeast Asian central bank has emerged as an active market player in the currency market and its presence is becoming more noticeable in thin summer trading conditions, dealers said. Big market moves are often attributed to Bank Negara Malaysia.
Reuters, Dec 1, 1989: Monetary authorities in major countries are about to find out what currency dealers in Tokyo already know – Malaysia's Bank Negara can't be pushed around. Jaffar Hussein, the Malaysian central bank governor, said in Kuala Lumpur on Wednesday that Bank Negara will not bow to pressure to check its foreign exchange activity and will do what it sees fit to preserve the value of its reserves.
Reuters, Dec 14, 1989: “They sometimes do a billion in one shot, mostly through US banks in Singapore,” said one dealer at a Tokyo city bank, who estimates his bank does 400-500 million dollars worth of business with Bank Negara on any given day.
In one of the first official reactions to the report, Jaffar said, "We are just a normal player. We are obliged to preserve the value of our RM20 billion reserves. If that is considered a big player then it must be it.” The problem, at least from the point of view of some traders, is exactly that - Bank Negara acts more like a market player than a central bank.
Asian Wall Street Journal, Dec 5, 1989: Bank Negara, Malaysia's central bank, curtailed its speculative activity in the foreign-exchange market following a US Federal Reserve Board request that it do so, according to currency traders and individuals familiar with the US position. Traders said that on some days, the Malaysian central bank would trade as much as between US$1 billion and US$5 billion. Although that is a small amount compared with the currency market's global daily volume of about US$400 billion, it is an enormous amount for a single central bank and a significant portion of Malaysia's about US$6.5 billion in foreign reserves. A central bank normally trades in the foreign-exchange market to influence the exchange rate of its country's currency, to buy other currencies in order to pay overseas obligations, or to occasionally adjust and balance its foreign-exchange reserves. In the case of Bank Negara, however, traders in Tokyo, Singapore and Hong Kong asserted that the bank's activities were aimed at turning a profit.
Asian Wall Street Journal, June 1990: Malaysia's Deputy Finance Minister Loke Yuen Yow said on Monday a small portion of the country's gold reserves were leased to a failed commodity unit of the US Drexel Burnham Lambert Group Inc. But the country expects to recover the gold valued at RM115 million (US$42.6 million dollars) from Drexel Burnham Lambert Trading Corp by 1991 and make a profit of RM16.7 million ringgit in the process, he said.
Asian Wall Street Journal, June 1991: Large buy orders carried the dollar to a 19-month high against the mark on Tuesday, and hopeful remarks on the US economy by Federal Reserve officials kept the currency near its intraday peaks in busy trading. Before May data for US housing starts were announced Tuesday, and ahead of separate appearances before US congressional committees by US Federal Reserve Board Chairman Alan Greenspan and Federal Reserve Board Governor David Mullins, Bank Negara was widely believed to have bought dollars, and possibly yen, for marks.
As the above reports suggest, not only was Bank Negara's forex trading a well-known fact as far back as the late 80s, but Jaffar was an active player, not an innocent party who was caught unawares by Dr Mahathir Mohamad, Nor Mohamed Yakcop and Daim Zainuddin executing trades without his knowledge.
Perhaps Anwar might provide an explanation for the above that clearly contradicts his assertions, but I suppose that would be akin to expecting pigs to fly.
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Maybe Mr 'I Don't Know' may wish to let us know whether he recollects any of what Ganesh has pointed out?
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