Malaysia hopes for low Japanese Yen credit interest rate as before

KUALA LUMPUR (July 23): Prime Minister Tun Dr. Mahathir Mohamad hopes the Japanese government would offer a low cost and a reasonable repayment period of 1 month before, compared with the 6% interest on 1Malaysia Development Bhd (1MDB) 's bonds.

"Malaysia ever took a loan with a 40-year repayment period. We are not sure if the Japanese government can give the same rate as before, but if we get a lower rate of interest, we will not be burdened by a high rate of return. 19659002] "They (Japan) are already considering it and we do not know how much, and what is the rate. We are already talking with the Japanese (government) and it is not easy for them to give to them, they have their own government to satisfy, "he added.

In 2012, 1Malaysia Development Bhd (1MDB) via Goldman Sachs Group Inc. Raised US $ 6.5 trillion via two issue of bonds with a coupon rate of 6% for the acquisition of energy assets. The largest of the bonds were guaranteed by Abu Dhabi-based International Petroleum Investment Co., which in total cost US $ 3.5 billion from 1MDB.

At the same time, Goldman Sachs was said to have earned RM300 million in the commission for setting the debt.

"The previous government's debt is too high at 6%. Goldman Sachs took a 10% commission to the credit of the government only earned 90% of the loan, but had to pay back 100% of the debt, "Dr. Mahathir said in reply to Bagan Datuk Dat Dat Seri Zahid Hamidi during questioning time in Parliament.

In a supplementary question, Zahid pointed out that Japan was one of the largest credit recipients of Japanese overseas development assistance in the 1980s and 1990s.

"At that time, the financial crisis was bad Due to the appreciation of the yen I agree that the interest rate is about 0.7% but what would happen if the yen appreciates (and) the overall cost is high, compared to our ringgit? What if the previous experience repeats itself? "Zahid said.

Zahid suggests domestic borrowing is more effective, though the value is higher because the cost would benefit local institutions.

In response, Dr. Mahathir said Malaysia's national debt more than RM300 billion, which was 27% of the gross domestic product (GDP) then, compared to RM1,087 trillion now.

Urging Zahid to recheck the country's 'annual reports' in the 1980s and 1990s, which contained the 'real figures' relating to the GDP, Dr. Mahathir said he knew 'a little' about economic growth figures, after being the PM for 22 years.

"If you have proof and 1990s), please show (it). We have never waved RM42 billion at one go.

"In fact, we had never heard of that word (trillion) then. I am not sure if RM1 trillion is less than RM1 billion but RM300 trillion is RM1 trillion, "he said.

Dr. Mahathir added that the government has to absorb the debts of its wholly-owned

Meanwhile, Dr. Mahathir contended, the government-linked companies (GLCs), although there is a debt ceiling of 55% to the GDP. That the value of the Japanese yen is higher, the conversion rate of the dollar is lower, compared to the ringgit-dollar conversion.

The Japanese yen is stronger compared to the ringgit when converted to US dollar, which The money from Japan would not be cheaper, Dr. Mahathir added. To overcome this problem, Malaysia plans to borrow Japanese credit in US dollar.

"One yen is one US hundred (but) RM1 is 25 US cents. The lowest value is not enough. So, we will borrow yen in US dollar for the amount we owe, "Dr. Mahathir said.

Later, when asked by reporters at the Parliament, he said:" As much as we can ".