KUALA LUMPUR: Bank Negara Malaysia (BNM) has not been approached by the Auditor-General’s (A-G) Department as the latter begins audit of the accounts of debt-ridden 1Malaysia Development Bhd (1MDB), said BNM deputy governor Dr Sukhdave Singh.

On Tuesday, A-G Tan Sri Ambrin Buang said his department was prepared to speak to all relevant parties, including various central banks in all cross-border transactions, in its conduct of the audit.

“To my knowledge, we have not been approached, and I think if we are approached and if our presence is needed, [we will cooperate],” Sukhdave told reporters yesterday after a seminar on BNM Governor’s Address on the Malaysian Economy, which was organised by the Malaysian Economic Association.

Segambut DAP Member of Parliament Lim Lip Eng had also recently questioned why BNM was not part of the task force to probe 1MDB. The task force currently comprises the Attorney-General’s Chambers, the Malaysian Anti-Corruption Commission and the police.

To this, Sukhdave said: “I think it remains to be seen what would be BNM’s role in that task force. So far, I have not received any communication on this.”

When asked on BNM’s role in the operations of state-owned corporations such as 1MDB, Sukhdave said in the case of sovereigns, BNM performs an advisory role.

“In the case of sovereigns, we advise them on [matters such as] whether they should go into the market, what kind of reception they would receive and so on, but when it comes to corporations wanting to borrow, we essentially do not get involved in commercial decisions but we look at it in terms of the risk it poses to the economy,” he said.

The deputy governor reiterated that the central bank performs solvency stress testing on banks to identify the type of borrowers that could pose a systemic risk to the economy.

On when the central bank makes a decision to intervene in the performance of the ringgit, Sukhdave said it happens when there is a risk that the movement in the exchange rate could destabilise the domestic financial market.

“We will intervene to the extent that we can mitigate that risk, but in a situation where every other emerging market currency is depreciating, we will not intervene in those kind of markets because it will be ineffective,” he said.

The ringgit strengthened to 3.6890 per US dollar yesterday, after sliding to a fresh six-year low of 3.7170 on Wednesday. 

Geoffrey Heenan, resident representative of Singapore for the International Monetary Fund (IMF), said it is important for any government-linked corporation (GLC) to maintain a high level of transparency.

“We (the IMF) do not have any deep knowledge of 1MDB’s position. We view it from a point of fiscal transparency, and of course we would recommend that all GLCs maintain a high level of transparency,” he said when met at the seminar.

This article first appeared in The Edge Financial Daily, on March 13, 2015.