Malaysia names new central bank governor

KUALA LUMPUR, Malaysia — Malaysia has named Nor Shamsiah Mohamad Yunus, an experienced former central bank official, as the new central bank governor.

Finance Minister Lim Guan Eng said Friday that the king has consented to Nor Shamsiah's appointment to head Bank Negara Malaysia from July 1 for a five-year term.

She succeeds Muhammad Ibrahim, who resigned two weeks ago after the central bank came under scrutiny over a 2 billion ringgit ($500 million) land purchase from the government. Proceeds were used to pay debts of the 1MDB state investment fund, which is under investigation for possible graft and money-laundering.

Muhammad denied any wrongdoing but said he resigned to avoid tarnishing Bank Negara Malaysia's reputation. He was the latest senior official to quit amid a corruption probe of the government of former premier Najib Razak, whose long-ruling coalition suffered a shocking defeat in May 9 elections.

"Bank Negara Malaysia will continue to focus on delivering its mandate of maintaining monetary and financial stability, in the best interests of the nation," Nor Shamsiah said at a joint news conference with Lim. She declined to comment when asked on her priorities, saying she will review the situation once she takes office.

Nor Shamsiah, who joined Bank Negara in 1987, left quietly two years ago and joined the International Monetary Fund before her latest appointment. She was Bank Negara deputy governor for six years and was part of an investigation team probing the 1MDB saga before she quit.

Zeti Akhtar Aziz, who was central bank governor for 16 years and now is part of a government advisory team, said Nor Shamsiah's appointment will inspire market confidence.

"She knows all about central banking, she will hit the ground running," Zeti told local media. "By appointing her, the government has demonstrated its respect for the institution and I think this is what the market wants to see, an institution that remains independent in performing its functions."

Najib set up the 1MDB fund when he took power in 2009. U.S. investigators say Najib's associates stole and laundered $4.5 billion from the fund from 2009 to 2014, some of which landed in Najib's bank account.

Prime Minister Mahathir Mohamad has reopened investigations into 1MDB that were stifled during Najib's rule and banned Najib and his wife from leaving the country. Mahathir, who was premier for 22 years until 2003, emerged from retirement to lead his alliance to an election victory bolstered by anger over the 1MDB scandal.

In addition to Muhammad, the country's attorney general and anti-graft chief also have been replaced.

Police have raided Najib's home and other properties, seizing 114 million ringgit ($28.7 million) in cash and hundreds of expensive designer handbags and jewelry. The government has said Najib's administration conducted an "exercise of deception" over 1MDB and deceived Parliament over the country's financial situation.