Mahathir: I was not told about Forex trading
PUTRAJAYA Former Malaysian prime minister Mahathir Mohamad said he was not informed about the central bank's detailed daily foreign exchange (forex) transactions as it did not have a legal obligation to report to him.
Nor did he have any right to interfere in its exclusive matters, he told the Royal Commission of Inquiry into the forex losses suffered by Bank Negara Malaysia in the 1990s.
"There was no material need for me as the prime minister then to interfere," he said.
During his testimony at the Court of Appeal yesterday, Dr Mahathir however said he recalled a meeting with former Bank Negara governor Jaffar Hussein at the central bank's trading room during the late 1980s.
"Mr Jaafar wanted to show me the place where forex trading took place to strengthen the country's economy. It lasted about half an hour," Dr Mahathir said.
He also said that in the late 1980s, he had knowledge of the forced increase in the value of the Japanese yen, carried out by several big countries in an event known as the "Plaza Accord".
He said Malaysia experienced a negative impact from this because the nation's loans, which were in yen, became three times more expensive.
The import value in yen was also increased by up to three times.
"At that time, without my knowledge, Mr Jaffar made the decision for Bank Negara to actively participate in forex trading to balance the currency's volatility and to protect the country's economy and reserves," Dr Mahathir said.
He said that although he found out about this only later, he accepted the reason why it was done.
Earlier, his wife, Dr Siti Hasmah, was seen in the public gallery during Mr Daim Zainuddin's testimony. Mr Daim was finance minister during Dr Mahathir's premiership. - THE STAR