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Malaysia's central bank governor resigns amid overhaul by new govt

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Central bank governor Muhammad Ibrahim has completed less than half of a five-year term which began in May 2016.

Kuala Lumpur

MALAYSIAN Prime Minister Mahathir Mohamad has accepted the resignation of central bank governor Muhammad Ibrahim.

The 92-year-old leader, who is purging top officials seen as having been close to the previous government, announced this latest in a string of departures on Wednesday

Malaysians delivered a shock election result last month by voting out a coalition that had led the country for the six decades since independence.

The new government is seeking to unearth suspected graft cases during the nearly 10 years that former premier Najib Razak was in power, casting a cloud over the future of several top officials.

Dr Mahathir said the decision on the central bank governor's successor hasn't been taken yet because the King's approval is needed first. He added that the new government would meet the monarch as soon as possible to discuss a successor.

Mr Muhammad, a career central bank official, has completed less than half of a five-year term which began in May 2016.

Former deputy central bank governor Nor Shamsiah Mohd Yunus, who left at the end of her term in November 2016, is among the candidates to replace him, two sources told Reuters.

Dr Mahathir, who has promised to reform state institutions and stamp out corruption, this week also replaced the attorney-general and the chief of the anti-graft agency.

Malaysia is looking for a new national stock exchange chief, two sources told Reuters, although Dr Mahathir said this was not discussed at the latest Cabinet meeting.

He has reopened investigations into state development fund 1Malaysia Development Berhad (1MDB) founded by Mr Najib, which is the subject of a global money-laundering probe.

Investigators say billions of dollars have gone missing from the fund.

The central bank chief's resignation follows comments by Finance Minister Lim Guan Eng last month that funds from a sale of land by the government to the central bank had gone towards paying the liabilities of the beleaguered 1MDB.

Mr Muhammad had defended the decision to buy the land, saying the transaction met government requirements.

In a note to employees on Wednesday, he dismissed as "totally untrue" the perception that the deal was aimed at aiding the misappropriation of funds through 1MDB.

"I am prepared to relinquish my post if I no longer have the strong trust and support of the public," he said in the passionate message that was leaked online.

"I cannot in good conscience continue if it affects the bank's image and reputation."

A Harvard University graduate, he was appointed following the retirement of long-serving governor Zeti Akhtar Aziz.

Mr Muhammad joined the bank in 1984 and became the deputy governor in 2010, before taking the top spot.

Two months later, he cut the interest rate in a surprise move, prompted by Brexit, to boost economic growth. The rate was restored to 3.25 per cent in January, as domestic consumption and exports improved. REUTERS

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