In a statement today, he dragged DAP parliamentary leader Lim Kit Siang into the spat, challenging him to write a book on Bank Negara Malaysia’s (BNM) so-called RM160 billion “scandal”.
See-To said no others, including the World Bank, IMF, the international credit rating agencies, international banks and the foreign media, had called this supposed RM160 billion loss a “scandal”.
“Perhaps to avoid looking silly, no other Pakatan leaders – the likes of Lim Kit Siang, Tony Pua or Rafizi (Ramli) – that you would normally expect to issue numerous statements – have even once added their voice to Mahathir’s wild claims.
“If the ‘losses’ were indeed true, then I encourage DAP and Pakatan supremo Lim Kit Siang to also write a book on the ‘BNM RM160 billion forex scandal’ – just like the book that Kit Siang wrote about the RM30 billion BNM forex scandal some years back.
“Kit Siang would never write such a book on this RM160 billion scandal as even he would not want history to judge him as a mad-man who would resort to desperate and totally untrue claims.”
PPBM chairman Mahathir had earlier claimed BNM lost US$39.6 billion (RM161.6 billion) in reserves between 2013 and 2015 and that it was much larger than BNM was said to have lost in forex trading when he was prime minister.
However, he had said, no royal commission of inquiry had been set up to probe the 2013-2015 losses, which took place under Prime Minister Najib Razak’s leadership. In a Facebook live forum, he had also said his allegation could be verified by anyone who read the central bank’s reports.
In rebutting Mahathir, on Dec 19, Finance Minister II Johari Abdul Ghani Johari had said the losses were due to outflows of foreign funds and not caused by foreign exchange trading.
He had said the outflows were in turn due to concerns over weak global growth prospects, anticipation of monetary policy normalisation in the US and a sharp decline in global oil prices.
Mahathir replied that such outflows could only be caused by BNM selling US dollars from the national reserves, causing the loss of money.
“This is admitted by Bank Negara itself. This is what happens when the ringgit is allowed to float. Can Mr Johari explain how else the reserves can shrink? Can he explain why Bank Negara has to follow the trend and join in the outflow of the US dollar?” Mahathir had asked in his blog earlier.
Answering the question today, See-To said it was true that BNM sold “the US dollar from our national reserves during that period – but that’s exactly what the reserves are for and that is indeed BNM’s job”.
In this case, he said, BNM got back ringgit in return. But in the forex scandal of the 1990s, not only did Malaysia’s US dollar reserves decline “but we did not get back ringgit in return as it was lost due to gambling – not due to BNM carrying out its duty to manage our currency and our reserves in a transparent manner with no cover-up”.
In fact, See-To said, BNM made sizeable ringgit profits between 2013 and 2016.
“It is certainly ridiculous to compare reductions in foreign reserves due to BNM carrying out its duties transparently with illegal gambling that led to actual losses that were then covered up. It certainly looks to be a desperate attempt to avoid taking responsibility for the findings in the recently-concluded RCI .
“As Finance Minister II Datuk Seri Johari Abdul Ghani explained, the 2013 to 2016 period was a period of capital outflows where investors were selling ringgit assets to get US dollars in return to invest back in the USA.”
Malaysia was not the only one affected by this. Numerous countries, including China, were similarly affected.
“In China’s case, their Yuan currency also weakened from RMB6.1 to almost RMB7.00 against the US$ while their foreign reserves dropped by US$1 trillion (RM4.08 trillion) during the 2013 to 2016 period.
“This US$1 trillion reduction in China’s reserves is on a scale that is many times bigger than the US$39.6 billion reduction in BNM’s reserves during the same period and proves that currency outflow and currency weakness then did not affect Malaysia alone.”
See-To said Malaysia’s forex reserves had started growing again from its low of US$94 billion in 2016 to US$102.2 billion as at Dec 15 this year.
This, he said, was higher than the forex reserves of US$87.1 billion when Najib took over as prime minister in April 2009.
“As capital outflows have now turned to inflows, BNM’s forex reserves have been on an uptrend over the past year and all indications show that it will continue to grow.”
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