Total outstanding Japanese loan at RM8b as of September this year

The loans are made for educational programmes or projects, infrastructure and utilities developments, as well as SMEs development funds, says finance minister

pic by MUHD AMIN NAHARUL

THE government has an outstanding Japanese loan of RM7.7 billion as of September this year.

Finance Minister Lim Guan Eng (picture) said of the total, 67.6% or RM5.22 billion (¥133.17 billion) loans were made by the government.

“Another 32.4% or RM2.48 billion is a government-linked company loan secured by the government,” Lim said in a written parliamentary reply. He responded to a question by Datuk Dr Noraini Ahmad (Barisan Nasional-Parit Sulong) who inquired on the total bond guarantees, strategic partnerships, joint ventures and loans received by the government from Japan, in addition to the previously issued Samurai bond debt.

He emphasised that the loans were made for educational programmes or projects, infrastructure and utilities developments, as well as small and medium enterprises (SMEs) development funds.

Over a span of two decades between 1992 and 2011, Lim said the government had received a total of RM15.33 billion in loans from Japan.

“From the total amount, 47.9% or RM6.84 billion were loans made by the Malaysian government, while the remaining 52.1% or RM8.49 billion is a government-linked company loan secured by the administration.

Last November, the Japanese government offered to guarantee up to ¥200 billion (RM7.4 billion) of Samurai bonds with a 10-year tenure.

The government is now considering a second yen-denominated debt sale following the success of the ¥200 billion Samurai bond issued earlier.

The first Samurai bond, with a coupon rate of 0.63% per annum, was oversubscribed by more than 1.6 times at ¥324.7 billion.

The sale marked the country’s successful return to the Japanese bond market after 30 years.

In a statement issued in September, Lim had also said the Japan Bank for International Cooperation has agreed to guarantee the second Samurai bond issuance and reduce the interest rate to 0.5% with a 10-year maturity term.

Japan, the world’s third-largest economy, is known for its ultra-low rates. In January, the Bank of Japan pledged to keep its 10-year government bond yields at 0% as central banks loosened monetary policies in the face of a global economic slowdown.

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