New central bank governor to ensure monetary policy continuity

New central bank governor to ensure monetary policy continuity

New central bank governor to ensure monetary policy continuity

Markets and commentators welcomed the announcement of a new governor at Malaysia’s central bank, Bank Negara Malaysia (BNM), last week with the ringgit and the local bourse strengthening on expectations of monetary policy continuity.

The prime minister’s office announced that BNM Deputy Governor Muhammad Ibrahim will take over as Governor from Dr Zeti Akhtar Aziz, who has been at the helm of the central bank for 16 years, with effect from May 1.

Analysts and commentators welcomed the appointment as it would provide continuity of monetary policy at the central bank while ensuring its continued independence in both setting policy as well as overseeing the vital financial sector.

As a long-time insider banker with some 32 years of working experience with the central bank, he is seen as someone with wide hands-on knowledge on all aspects of central banking and banking supervision.

Muhammad was widely seen as the preferred choice of outgoing Governor Dr Zeti, who said in a statement:

“The appointment is definitely positive for the country. Being part of our policy team at the Bank will provide continuity and the much needed certainty in this prevailing period of great uncertainty. I have great confidence in his ability to lead the Bank going forward into the future.”

Chairman of the Association of Banks Malaysia and CEO of Malaysia’s largest banking group, Maybank, Abdul Farid Alias, said Muhammad’s vast experience, extensive knowledge and leadership record qualify him well for this new challenge.

“We are confident that he will continue the good work of Dr Zeti Akhtar Aziz in leading what can be considered one of the most respected central banks in the world. The banking industry in Malaysia has, for years, benefitted from the guidance we received from BNM as well as from the sound foundation and policies it put in place to ensure the integrity of the financial system and economic stability of the country. Muhammad is no stranger to us in the financial services industry and we assure him of our continued cooperation, as well as support for the central bank’s efforts in ensuring that the financial system is further strengthened and the development needs of the country sustained, especially in these complex and challenging times.”

Tengku Zafrul Aziz, chief executive of CIMB Group, said Muhammad brings into his governor role a myriad of skills and years of valuable experience honed in various roles including bank regulation & supervision and strategic planning.

“We are confident he will further the good work of his predecessors while imprinting his own stamp of leadership to keep Malaysia’s financial system strong, stable and progressive.”

Muhammad has been Deputy Governor at BNM since 2010. He joined the central bank in 1984 and has served in the areas of bank regulation and supervision, strategic planning, payment systems, insurance, offshore banking and treasury and financial markets.

He was the managing director of Danamodal Nasional Berhad, a bank recapitalisation agency set up during the Asian financial crisis which began in 1998. The agency was responsible for ensuring that banks were adequately capitalised and could function during the crisis.

He was also a former commissioner of the Securities Commission of Malaysia, which oversees capital markets in Malaysia, and served as a council member of the Malaysian Institute of Accountants. Muhammad has been a director of national oil corporation, Petroliam Nasional Berhad, or Petronas, since April 2014.

Muhammad holds a Masters Degree from Harvard University, an accounting degree from the University of Malaya and a Postgraduate Diploma in Islamic Banking and Finance from the International Islamic University Malaysia.

In his leisure time, Muhammad, 56, enjoys reading and is an avid fan of the arts. He is a father of two sons and a daughter.

Photo: Hafzi Mohamed/TMR

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