The Malaysian Insider
9 October 2015

Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz should be brutally honest about the issues plaguing the country, said Euromoney in its October edition, as the ringgit continues its freefall and the economy begins to stutter.

The business and finance magazine said all this while, Zeti had been using words like “domestic factors” to describe the problems besetting the country, instead of saying that the predicament lies with debt-laden state owned firm 1Malaysia Development Fund (1MDB) and the RM2.6 billion donation in Prime Minister Datuk Seri Najib Razak’s personal accounts.

“Zeti has demonstrated through 15 matchless years of service that she is not one to pull her punches under political pressure.

“Now is not the time for her to start doing so. It would effectively mean that the BNM she tirelessly champions has not advanced at all.

“Zeti could go harder on what really ails the country. As Malaysia’s most trusted public official, she possesses something that the political class are in dire supply of – respect and moral authority,” the magazine said.

Despite assurances from Putrajaya that Malaysia’s fundamentals are strong, concerns have been mounting over the economy as the ringgit, Asia’s worst performing currency in the past one year, went beyond the RM4 mark against the US dollar.

This had been attributed to worsening global outlook, China’s surprise devaluation of the yuan, plunging commodity prices and the current political scandal linked to Najib over the alleged donation from an unknown Middle Eastern donor while at the same time, his brainchild, 1MDB is facing multiple probes of its alleged financial irregularities.

However, Euromoney said Zeti, 68, who is due for retirement next April, had gone ahead with the probe into 1MDB even if other investigations had seemingly halted.

“Zeti isn’t a Najib naysayer yet, at least not publicly, but the sudden whispering campaign accusing her of corruption is ugly,” the magazine said.

It said if Najib sacked Zeti, he might have removed an “irritating domestic pebble” but the magazine warned of far reaching consequences, describing it as a “devastating blow for Malaysia’s credibility”.

“The market’s response to her ouster could make the ringgit’s dive so far this year look like the unremarkable first act of an operatic tragedy for the country, and bring neighbouring Asean down too.

“After all those years of stellar service, it would be sad if this was the background to Zeti’s departure,” it said.

But the Attorney-General’s Chambers (AGC) yesterday cleared the firm of any offence related to false disclosures.

The AGC said it had considered the central bank’s appeal but decided no further action due to lack of new evidence.

Euromoney said it does not seem likely the ringgit freefall will end anytime soon, citing most of Malaysia’s key indicators which are going backwards.

It said Zeti did not do herself any favours by insisting that the ringgit is among 120 currencies that had fallen against the greenback and that the market had “unfairly” misread Malaysia’s evolved economy as still commodity-dependent, and not really about its dysfunctional, distracted and probably corrupt government.

“Markets can be irrational, but after 12-18 months of intensifying scandals surrounding Najib and at 1MDB, markets are neither blind, nor heedless,” the magazine added. – October 9, 2015.