Ex-forex dealer: I once transacted RM2 billion in a day

This was at the instruction of BNM adviser Nor Mohamed Yakcop although dealers are limited to US$30 million a day, says the witness at RCI into Bank Negara's forex losses.

fizaman

PUTRAJAYA: A former Bank Negara Malaysia (BNM) forex dealer made a shocking revelation before the Royal Commission of Inquiry that he made transactions amounting to US$800 million (RM2 billion) in one single day at the order of then bank adviser Nor Mohamed Yakcop.

Fizaman Noor Mohamad Nasir said as a dealer, he was only entitled to a cap of up to US$30 million a day.

“However, there was one occasion I conducted transactions that amounted to US$800 million (RM2 billion) at the instruction of Nor Mohamed,” he told the five-man tribunal, chaired by Mohd Sidek Hassan.

He said the exchange rate during that time was US$1 to RM2.50.

Fizaman, however, did not specify the exact date or year he entered into such trading.

He said he was a dealer for Bank Negara between 1989 and 1998 and the much talked about forex scandal is said to have taken place between 1988 and 1994.

The sixth witness said, from his observation, the central bank management made losses in forex trading.

“As a dealer, I made some profits but the amount was small,” he said.

He said the forex trading by the central bank during the period had the motive to make large profits and it was based on speculation.

“However, I do not know the total losses suffered by BNM during that period,” he said, adding that he did not know or find out about the matter from the central bank’s banking department responsible for carrying out forex trading.

Fizaman said during his tenure as a dealer, he worked with three others and Nor Mohamed, who was director of the banking department-cum-adviser of BNM.

He said as a dealer, he would analyse the market based on movements of the ringgit and foreign currencies like the US dollar, British pound, Japanese yen, Deutsch mark and Swiss francs that were traded globally.

“I also studied global economic conditions and gave my input to the management if requested,” he said.

The witness said his view was usually given to the chief forex dealer and Nor Mohamed.

Fizaman said he was initially given up a limit of up to US$1 million but his limit was upgraded to the maximum of US$30 million a day.

He said although he viewed the currency market to be negative on certain days, the final decision to trade was in the hands of Nor Mohamed.

Before the setting up of the RCI, a task force had found that the central bank had incurred forex losses of at least US$10 billion (about RM44 billion at present value) between 1991 and 1993.

In June, the Prime Minister’s Office said the cabinet had agreed to set up the RCI as there was sufficient evidence to justify further investigations into the matter.

It said the RCI was to protect public interests by determining the extent to which the losses had affected national reserves.

The task force, which was set up on Feb 15, was also chaired by Sidek, a former chief secretary to the government.

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