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    Apr 28, 2016

    Najib picks new central bank governor


    MALAYSIAN Prime Minister Najib Razak yesterday appointed a new central bank governor, who will take over from longtime chief Zeti Akhtar Aziz amid the growing scandal involving the debt-ridden state-owned investment fund 1Malaysia Development Berhad (1MDB).

    Mr Najib released a statement saying Bank Negara Malaysia's (BNS) deputy governor Muhammad Ibrahim would start his five-year term from Sunday, The Star daily reported.

    The Harvard-educated Muhammad, 56, was appointed deputy governor in 2010.

    He has served with the central bank since 1984.

    The appointment of a career central bank official is likely to reassure markets amid worries about the transition, Agence France-Press pointed out.

    Earlier, the United States-based Wall Street Journal (WSJ) said Irwan Serigar Abdullah, a top government official on the 1MDB board of advisers and a Najib ally, was set to become the new head.

    The appointment of Mr Muhammad once again exposed the WSJ's "lies and total disregard for facts" in its reporting on Malaysia, charged Mr Razak's press aide yesterday, the Malaysiakini online news portal reported.

    WSJ has published a series of articles suggesting more than US$1 billion (S$1.35 billion) that had appeared in Mr Najib's private accounts were channelled from 1MDB.

    The newspaper also said in one report that Ms Zeti had objected to choosing Mr Irwan as her successor and had instead recommended Mr Muhammad.

    Some Malaysians believe it was WSJ's report that had thwarted Mr Najib's attempt to appoint Mr Irwan.

    Ms Zeti, 68, who took over BNS in 2000 and has won international respect for her steady management, had expressed fear that the 1MDB woes would have adverse affects on Malaysia's financial markets.

    She had at least twice urged criminal proceedings against 1MDB but the attorney-general dismissed the recommendations, saying there was no wrongdoing, Bloomberg said.

    Recently, she has kept monetary policy steady to aid domestic demand as Mr Najib counts on consumers to support growth amid constraints in boosting state spending.

    The reputation of Mr Najib's government took another hit on Tuesday when 1MDB defaulted on the interest payment for a US$1.75 billion bond amid a dispute with Abu Dhabi's sovereign wealth fund International Petroleum Investment Company, co-guarantor of the bond.