Malaysia's central bank governor exit terms being discussed; may resign Wednesday

SINGAPORE/KUALA LUMPUR: Malaysia is discussing the exit terms of its central bank governor Muhammad Ibrahim and an announcement on his resignation could be made as early as Wednesday, two people aware of the discussions said.

Muhammad, a career central bank official, has finished less than half of the five-year term he began in May 2016.

The development comes after a surprise change of government last month, and following accusations that the former Malaysian Prime Minister Najib Razak used funds from a central bank transaction to pay the liabilities of beleaguered state fund 1Malaysia Development Berhad (1MDB).

"Terms of his exit are being discussed and an announcement on his resignation could come out as early as tomorrow (Wednesday)," one of the people aware of the discussions said on condition of anonymity.

Another government source close to the Prime Minister's office confirmed plans to announce the decision on Wednesday.

Muhammad had offered to resign from his post, Bloomberg reported earlier on Tuesday, quoting sources.

A spokesman for the central bank declined to comment on the report. The finance ministry also did not comment.

Mahathir Mohamad defeated Najib in a surprise May 9 election victory and has vowed to reform institutions that he said were weakened by the previous administration.

The 92-year-old premier appointed a new attorney-general on Tuesday and has also replaced the anti-graft agency chief and other senior government officers.

The new finance minister, Lim Guan Eng, said last month that funds from a land sale made by the government to the central bank for about 2 billion ringgit ($502.51 million) were used to pay for 1MDB's obligation to Abu Dhabi state fund IPIC.

The central bank responded by saying the transaction complied with government requirements, and it has handed details of the deal to the anti-graft agency.