Zeti had indirectly alluded to the contagion effects of 1MDB when she BNM would not allow any single entity to undermine the country’s financial system.
Bank Negara Finally Admits
On June 18, in yet another admission that the contagion effects of 1MDB and the political development are becoming worse, the Central Bank did the unthinkable – it waded into the murky world of politics.
|Resolve Domestic Issues, say Bank Negara|
It said it would not be drawn into any political agenda and would remain focused on maintaining monetary and financial stability.
So, after months of expounding the country’s strong economic fundamentals and blaming external factors for the weakness of the ringgit, the Central Bank finally acknowledged that “domestic issues” are equally to be blamed.
The national news agency, Bernama had described the BNM statement as attempt to “depoliticise the debate over the weakening ringgit.”
The Central Bank was responding to what it called “the recent inaccurate and misleading media reports” on the central bank and the ringgit’s volatility.
It statement came a day after Deputy Finance Minister Ahmad Maslan had said that Bank Negara’s information indicated Tun Dr Mahathir Mohamad’s criticism against Mohd Najib was one of the reasons for the weakness of the ringgit.
The comments was made in parliament and reported in local media. Ahmad Maslan, who became the butt of many Internet jokes for his outrageous statements on the economy in support of the Prime Minister – the latest being his GST-free fried rice - had emerged as Mohd Najib’s poster boy.
|Ahmad Maslan (left) is Mohd Najib's poster boy|
Instead “the roadside sources” said he faced considerable opposition from member of the Umno Supreme Council on 1MDB. The sources said the disagreement was so serious that there were the banging of the tables and raised voices at the sitting of the Council.
Despite Mohd Najib telling the press that the Council supported him, sources said some members told him point blank that 1MDB could kill Umno.
Cooking Up The Book
Business as Usual
In the meantime Mohd Najib continues to do what he does best – gives handouts. A few days after chairing the pre-budget dialogue and telling the people to “remain vigilant in the face of economic uncertainties” he announced a special Raya Bonus for the civil servants.
Mohd Najib believes “money is king” and favours could be bought.
He acknowledged that household debt remained high - at 87.6% of gross domestic product - while commodity prices, particularly crude oil, liquefied natural gas and palm oil, were anticipated to remain soft.
Yet he continues to play Santa Clause to prop up his popularity.
According to MIDF Research head, Zulkifli Hamzah, as of the middle of thin month, foreign investors had been net sellers on Bursa Malaysia for seven consecutive weeks. In his weekly fund flow report dated June 15, Zulkifli said for the third week running, the amount offloaded by foreign funds was more than RM850 million a week. That’s a whopping RM2.55 billion.