Malaysia loses pounds 1.4bn bet

Click to follow
The Independent Online
KUALA LUMPUR (AFP) - Bank Negara, the Malaysian central bank which yesterday announced foreign exchange losses of 5.7bn ringgit (pounds 1.43bn), came under pressure to stop betting on world currency markets and stick to its role managing the economy.

Bank Negara should focus on its rightful role of regulating monetary policy and keeping the economy on track, Malaysian banking officials said.

It was the second year such adventurism had gone awry. The bank lost 9.3bn ringgit in 1992 from currency operations.

Under the stewardship of Jaffar Hussein, the governor, the bank has built a formidable reputation as an aggressive speculator in international currency markets, mainly in London, New York and Paris, dealers said.

Forex dealers said Bank Negara's woes stemmed largely from the world currency crisis during the realignment of Europe's exchange rate mechanism.

The bank bought colossal amounts of sterling in the hope of making a killing on its strengthening. Instead, it broke through the floor with the realignment of the European Monetary System beginning in late 1992. Bank Negara officials maintained there was no mismanagement, deviation or breach of trust.