Yes. The year was 1994 when Lim Kit Siang found it ultra-important to publish a book on the Bank Negara Malaysia (BNM) foreign exchange scandal that caused the loss of RM30 billion (estimated to be at RM49 billion in today’s terms).
The book is called, as you would have guessed, ‘The Bank Negara RM30 Billion Forex Losses Scandal‘.
The BNM forex scandal losses in 1991 made international headlines at the time, forcing the resignation of BNM’s governor Jaffar Hussein.
Again I should thank Kit Siang for writing all this, making it easier for me to see what he had written on the issues he raised in the past.
In 2004, Kit Siang called upon Nor Mohamed Yackop who then was sworn in as a Senator to become Finance Minister II to issue a White Paper on the matter.
“Up to now, the government has failed to “come clean” on the colossal Bank Negara forex losses as a result of speculation in the international currency markets from 1992-1994, with the losses cited as ranging from RM10 billion to RM30 billion. In Parliament in 1994, I had given reasons as to why the Bank Negara’s forex losses as a result of its forex speculation operations could have amounted to as high as RM30 billion, which had not been seriously rebutted by any top government leader or Bank Negara official,” he wrote on his blog limkitsiang.com.
In April 1991, a Reuter news agency report from London described Bank Negara as “a dominant force on the foreign exchange scene for some years” and it was accused by some forex operators as “a market bully”.
The 1991 Reuter report states:
“Over the past two years it has stepped up its trading volume, and this year it has started dealing in what dealer described as ‘really massive amounts’…
“Typically, Bank Negara operates in US$50 million lots, compared with the market norm of US$5 million or US$10 million and deals with maybe six major banks in Europe and six in New York, dealers said.
“One trader said the only dealers rivaling Bank Negara would be the Japanese funds. But while these funds enter the market no more than once or twice a year, Bank Negara is coming in and doing yards (billions) of dollars a day.
“”Its recent technique has been to hit major banks for US50 million each, then his them 10 minutes later, dealers said.
“Then it changes centre, and does it all over again.”
The April 1994 issue of Malaysian Business – one of the publications in the New Straits Times stable – reported that Bank Negara’s maximum exposure in the foreign exchange markets reached as high as RM270 billion – three times the country’s GDP and more than five times the country’s foreign reserves at the time!
Kit Siang added that some Government leaders were wise after the event, and one of them was none other than Daim Zainuddin, under whose first tenure as Finance Minister from 1984-1991 the Bank Negara’s unorthodox forex speculation started, who said on April 4, 1994 that while those responsible for the huge forex losses of Bank Negara had accounted for their mistakes by resigning, central banks should never “play with fire” with such forex speculation.
It was Kit Siang who pointed out the irony.
In 1995, a book on international high finance, ‘The Vandal’s Crown‘ by Gregory J. Millman on Page 229 had this to say about the Bank Negara forex scandal:
“Using all the resources a central bank commands – privileged information, unlimited credit, regulatory power, and more – Malaysia’s Bank Negara became the most feared trader in the currency markets. By trading for profit, Bank Negara committed apostasy against the creed of central banking. Instead of working to ensure global financial stability, Bank Negara repeatedly shoved huge sums of money into the most vulnerable market situations in order to destabilize exchange rates for its own profit” (p.226)
“(Bank) Negara operated behind a thick veil of secrecy. The bank seldom spoke publicly about its controversial trading activities. Yet it was increasingly clear to foreign exchange traders that Bank Negara’s operations in the foreign exchange markets went far beyond simple self-defense. It became the most awesome currency trader in the world.” (p. 227)
“(Bank) Negara’s market manipulation was so egregrious that one American central banker said, ‘If they tried this on any organized exchange in the world, they’d go to jail.’ However, in the unregulated international currency markets, there were neither police nor jailers. The only rule was the rough justice of the vandals, and it was this rule that eventually brought (Bank) Negara down.
“In 1992, (Bank) Negara took on a large pound sterling position, apparently expecting Britain to maintain the discipline required by the European Exchange Rate Mechanism. It was a bad economic and political judgement. (Bank) Negara lost approximately $3.6 billion when Britain withdrew from the ERM, letting sterling collapse. The next year, (Bank) Negara lost an additional $2.2 billion. By 1994, Bank Negara was technically insolvent and had to be bailed out by an infusion of fresh money from Malaysia’s finance ministry.”
Recently, Abdul Murad Khalid who was the Assistant Governor of BNM who resigned in 1999 revealed that the forex losses were in actual US Dollars and not in Malaysian Ringgit.
“There was no control… The most important thing is that there was no investigation at all,” Murad was quoted as saying by NST.
Asked if the then Prime Minister knew about the losses, he replied: “I’m sure the governor briefed them.”
Kit Siang’s silence on this issue is indeed deafening. The so-called champion of the rakyat now has his balls as wrinkled as his face is. And all to achieve his personal political ambition.
In 1993, Anwar Ibrahim who was then the Finance Minister responded on behalf of his then-master, U-Turn Mahathir, to Kit Siang’s query on some “rumours about BNM losing money gambling forex“.
Anwar said that the rumour was not true at all.
When confronted, again by Kit Siang, a year later, Anwar said “the amount is not huge.”
The above engagements can be found in the Parliament Hansard.
After Murad’s revelation we know now that the amount is actually colossal.
We also know that U-Turn Mahathir as well as Daim Zainuddin were very much in the know of the losses.
And we know that Lim Kit Siang is just another opportunist snake manipulating the issue to gain support from the rakyat but now bats no eyelid to work hand-in-hand with his sworn enemy so he could come into power.
I am pretty sure he feels pleased looking at himself in the mirror every morning knowing he had blatantly lied to the people.
wǔdǎyī!
SeaDemon Says 
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