KUALA LUMPUR: The government has spent a total of RM192.1 million on interest payments for the 10-year Samurai bonds worth 200 billion yen (RM7.2 billion) from September 2019 to March this year.

Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, said the yen-denominated bonds carry an annual interest rate of 0.53 per cent.

"The issuance of the Samurai bond was a collaboration between the Japanese government and Malaysian government to strengthen economic and cultural ties between the two countries.

"The opportunity offered by the Japanese government for Malaysia to enter the Samurai bond market at that time (2019) further enhanced Malaysia's position as a leading investment destination in the region and diversified its financing base.

"The interest on the Samurai bond is paid twice annually, in March and September and it is subjected to the exchange rate on the day of the transaction," he said in a parliamentary written reply.

Anwar said this in response to Lim Guan Eng (PH-Bagan) who enquired about the latest status of the Samurai bonds issued in 2019 during the the latter's tenure as the finance minister.

Lim, in 2019, said the government had successfully issued the Samurai bonds with an oversubscription of more than 1.6 times at 324.7 billion yen against the 200 billion yen offered.

The oversubscription of the yen-denominated bond, according to him, was a testament to confidence in the country's economy by various Japanese institutions and investors.

Meanwhile, Anwar said the ringgit has also begun strengthening against the Japanese yen in March 2022, resulting in lower interest payments on the bonds between March 2022 to March this year.

"The strengthening of the ringgit also reduced the total debt to RM6.26 billion by the end of March, considering the exchange rate of RM3.1308 for every 100 yen."

He added that the ministry will also continue to fulfil its interest payment obligations on the Samurai bonds until the debt matures in March 2029.

https://www.nst.com.my/news/nation/2024/07/1077062/rm1921mil-spent-samurai-bonds-march-year-dewan-rakyat-told