Bank Negara Malaysia
From Wikipedia, the free encyclopedia
 Central Bank of Malaysia Bank Negara Malaysia (Malay) |
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| Headquarters | Kuala Lumpur, Malaysia | ||
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| Established | January 26, 1959 | ||
| Governor | Zeti Akhtar Aziz | ||
| Central Bank of | Malaysia | ||
| Currency | Malaysian ringgit | ||
| ISO 4217 Code | MYR | ||
| Website | bnm.gov.my | ||
Bank Negara Malaysia or BNM is the Malaysian central bank. Its headquarters is located in Kuala Lumpur, the capital of Malaysia, and was established on January 26, 1959 (as the Central Bank of Malaya or Bank Negara Tanah Melayu) to issue currency, act as banker and adviser to the Government and influence the country's credit situation.
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[edit] Governors
Since its inception there have been seven governors.
| Governor | Year |
|---|---|
| Tan Sri W H Wilcock | January 1959 - July 1962 |
| Tun Ismail bin Mohamed Ali | July 1962 - July 1980 |
| Tan Sri Abdul Aziz bin Taha | July 1980 - June 1985 |
| Tan Sri Dato' Jaffar bin Hussein | June 1985 - May 1994 |
| Tan Sri Dato' Ahmad bin Mohd Don | May 1994 - August 1998 |
| Tan Sri Dato' Seri Ali Abul Hassan bin Sulaiman | September 1998 - April 2000 |
| Tan Sri Dato' Sri Dr. Zeti Akhtar Aziz | May 2000 - Current |
[edit] Recent history
In 1985, following the "Plaza meeting" of G-5 finance ministers in New York City, the US dollar fell sharply causing major losses in Bank Negara's dollar reserves. The bank responded by starting a program of aggressive speculative trading to make up these losses (Millman, p. 226). Jaffar Hussein, the Bank Negara Governor at the time, referred to this strategy as "honest-to-God trading" in a December 1988 speech in New Delhi.
In the late 1980s, Bank Negara under Governor Jaffar Hussein, was a major player in the forex market. Its activities caught the attention of many; initially, Asian markets came to realize the influence Bank Negara had on the direction of forex market. Alan Greenspan acting the Federal Reserve chairman later realized Bank Negara's massive speculation activities and requested the Malaysian central bank to stop it.
BNM sold between $500 million on September 21, 1990 - $1 billion worth of pound sterlings in a short period, driving the pound down 4 cents on the dollar (Millman, p. 228). In response, bankers began front running Bank Negara's orders. Two years later, Bank Negara attempted to defend the value of the British pound against attempts by George Soros and others to devalue the pound sterling. George Soros won and Bank Negara reportedly suffered losses of more than USD $4 billion. [1] Bank Negara lost an additional $2.2 billion in speculative trading a year later (Millman, p. 229). By 1994, the bank became technically insolvent and was bailed out by the Malaysian Finance Ministry (Millman, p. 229).
In 1998, Bank Negara pegged 3.80 ringgit to a US dollar after the ringgit substantially depreciated during the 1997 Asian financial crisis. In July 2005, the central bank abandoned fixed exchange rate regime in favor of managed floating exchange rate system an hour after China floated its own currency. This resulted in capital flight of more than USD 10 billion, thought to be due to the repatriation of speculative funds that entered the country in anticipation of the abandonment of the peg: - Bank Negara's foreign exchange reserves increased by USD24 billion in the one year period between July 2004 and July 2005 (see table below). During this period there was widespread believe that the ringgit was undervalued and that if the peg was removed, the ringgit would appreciate.
| 31 July 2004 | USD 54 billion |
| 31 December 2004 | USD 66 billion |
| 31 July 2005 | USD 78 billion |
| 31 March 2007 | USD 88 billion |
| 31 July 2007 | USD 99 billion |
| 31 December 2007 | USD 101 billion[1] |
| 31 March 2008 | USD 120 billion[2] |
Bank Negara continues to run negative interest rate differential to USD. The ringgit has appreciated gradually since the peg was abandoned and as at 28 May 2007, it traded at around 3.40 to the US dollar. Malaysia's foreign exchange reserves have increased steadily since the initial capital flight, and as at 31 March 2007 the reserves stood at approximately USD88 billion, which is approximately USD10 billion more than the reserves just prior to the peg being abandoned.
On 31 July 2007 the Malaysian reserves stood at approximately USD98.5 billion which is equivalent to RM340.1 billion. The figure increase to USD 101.3 billion in 31 December 2007 which is equivalent to RM335.7 billion[1]. Bank Negara's international reserves increase further 15 days later to USD 104.3 billion or MYR 345.4 billion[3][4].
[edit] Locations
Bank Negara's headquarters is located at Jalan Dato' Onn in Kuala Lumpur. A KTM Komuter station with the same name is located next door. An overhead crossing over Jalan Kuching and the Gombak River allows pedestrians access to the Bandaraya LRT station and the rest of downtown Kuala Lumpur.
Bank Negara had previously maintained branches in each of the country's state capitals. Most of them were closed in the 1990s when retail banks began taking over most of the counter services. There are still branches in Penang, Johor Bahru, Kota Kinabalu, Kuching and Kuala Terengganu, while the Shah Alam branch was converted into a currency distribution and processing centre. Bank Negara also retains representative offices in London and New York City, and a personnel training centre in Petaling Jaya, Malaysia.
[edit] References
- ^ a b BNM Press Statements
- ^ "International Reserves of BNM as at 31 March 2008", Bank Negara Malaysia.
- ^ International reserves at US$104bil
- ^ Bank Negara reserves at RM345.4b
- Gregory J. Millman, Around the World on a Trillion Dollars a Day, Bantam Press, London and New York, 1995.
[edit] See also
[edit] External links
- (Malay) (English) Bank Negara Malaysia official site
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