Who is he?
Muhammad Ibrahim is deputy governor of Bank Negara Malaysia, a position he has held since 2010. Muhammad has worked at Bank Negara since 1984 – making him the most senior of the three deputy governors. During the 1998 Asian financial crisis, he was managing director of Danamodal Nasional, a bank recapitalization agency set up to restructure banks affected by the panic. Muhammad holds an accounting degree from the University of Malaya, a master’s degree in public administration from Harvard’s Kennedy School of Government, and a post-graduate degree in Islamic banking and finance from the International Islamic University Malaysia.
Why is he in the news?
The prime minister’s office on April 27 named Muhammad Ibrahim as the new governor of Bank Negara Malaysia. He replaces Zeti Akhtar Aziz, the highly regarded governor whose 16-year tenure will finish on April 30.
What can we expect from him?
Muhammad will become governor at a critical time for Bank Negara Malaysia. The bank on April 28 issued a fine against 1Malaysia Development Berhad (1MDB), Prime Minister Najib Razak’s embattled state fund, for failure to comply with the Financial Services Act. Bank Negara, under Zeti’s direction, has stood out among Malaysian government bodies for its willingness to question the prime minister over billions of dollars alleged to have been misappropriated from the fund, including $700 million deposited into Najib’s personal accounts.
Muhammad’s appointment to the post just three days before Zeti steps down is an indicator of underlying differences within the government. A March 11 Wall Street Journal report named Najib ally and current Finance Ministry chief secretary Mohd Irwan Serigar as the presumptive nominee, sparking widespread concern that the prime minister would use his influence to shut down Bank Negara’s probe of 1MDB. The appointment of Zeti’s deputy and preferred choice Muhammad more than six weeks later indicates a government willingness to focus on finance instead of politics, and suggests a possible crack in Najib’s tight control of the 1MDB story.
Muhammad’s accession is viewed positively by experts, who expect continuity of Zeti’s prudent monetary policies. Recent reforms to strengthen financial institutions and implement a general services tax were passed to mitigate the damage from the drop in oil prices, and Zeti’s plan to have Malaysia back to previously enjoyed levels of growth within two years is likely to continue under Muhammad.