Bank Negara Forex Loss RM130 Billion?

Another Brick in the Wall

The official version of losses by government during the hey days of Tun Dr Mahathir on the Bank Negara Malaysia forex trading losses was less than RM10 million.

However, the government position changed from not true, to only paper loss, and finally Raja Petra raised the point that the then Prime Minister and Minister of Finance lied to the public, Parliament and cabinet.

Tengku Razaleigh Hamzah used to claim the losses could be RM16 billion as indicated by his calculated negative capital position of BNM. Dato Murad have been talking of US$10 billion but only got notice recently and a Special Task Force to investigate was convened. The exchange rate then would mean it could range from RM30 to RM40 billion.  

The Mole columnist, Salahuddin bin Hisham, who debunked the current claim on the slide of ringgit, posed the question: Did BNM forex wipe out the country’s reserve? The foreign reserve then was less than RM100 billion, thus the losses could be in that ball park.

Now, Raja Petra's posting over the weekend here is more alarming:

The real losses were more than US$13 billion or RM130 billion at today’s value. The monthly turnover was RM700 billion, while the total forward position was US$150 billion.

This blog believed that the mess is by Tun Dr Mahathir and Tan  Sri Mohamed Nor Yakcop. And the Mole columnist believed it had something to do with: 

All as a result of someone mesmerised to a new toy of program trading introduced to him and yearned to get even with the market for a major loss earlier for trying to corner a commodity market.

Program trading is for trading in smaller amount and riding on trends. The way BNM was trading it was as if they were trying to be the Hunt Brothers that dominated the silver market at one time

RPK insisted it involved Tun Daim Zainuddin.

Daim had been blamed then for "firing" the successor to Tun Ismail Ali for BNM Governor, Tan Sri Aziz Taha. However, sources claimed it was at Mahathir instruction in reaction to a 30 or was it 13 pages of critical letter to him.

Someone should get in touch with Aziz Taha. He is the only one still around among the many that wrote to Mahathir of their concern on the financal status and running of BNM then.

It will relate to the forex losses.

Not only did government lied on the real status of BNM financial position, presumably to save nation's face and preserve financial credibility of country, but there was a shabby cover-up to hide the true losses.

The Mole columnist wrote extensively in Mystery surrounds BNM forex loss and The cover-up of BNM's forex loss.

Everything To Hide 

Though initially putting up a brave front as his lawyer, ANSARA Kuantan Hanif Khatri said he will attend and Mahathir himself said bring it on, as the RCI approach, he had cold feet and applied to remove two members of the RCI.

Hanif Khatri tried to seek the right to cross examine but was denied. Court rejected Mahathir's application.

And we thought Mahathir is #Nothing To Hide 2.0. He has #Something To Hide  

The Mole columnist believed Mahathir has Everything To Hide. His view is the BNM forex loss was the single biggest bungle of Mahathir that have a wide and deep impact on the nation, people and his own development policy.

He does not want it to be known and his perceived "glorious" legacy destroyed.

The country might have been defenceless to attacks on the ringgit by hedge funds in 1997.  Dr Mahathir conveniently made Soros a scapegoat to lay blame.

The currency crisis led to a massive economic crisis and contributed to hardship to the rakyat and country for many years.

Big businesses failed and the banking industry had to be restructured to avert collapse.

There were corporate Bumiputera entrepreneurs developed by Dr Mahathir and Tun Daim Zainuddin to spearhead the development of a Bumiputera industrial and commercial community that crashed along.

That led to loss of jobs and wiped a significant portion of Bumiputera corporate wealth. Most of these corporate personalities could not return and bounce back.

However, there is more to the story as there was systematic dismantling of their empire and their assets sold to other Malaysian businessmen that possibly could be proxies.

For the common folk, it affected the downfall of financial sponsorship and droves of students abroad had to be recalled home.

There was widespread unemployment. Small businesses went belly up. Many became bankrupt.

There was a significant loss in the country’s wealth..

Mahathir's mminion may have tried to divert attention or do counter attack to spread words ringgit is declining  in value.

Perhaps, the short-term trend is bearish and on the long term there is a looming threat as SIngapore will be launching ringgit future market as that would get around any action by BNM to tighten on the forward swap market in any crisis.

Well ... Rgt @ 5.00? Try again, Soros. Or is it Mahathir?