MALAYSIA is projected to gain over RM500 mil from the RM7.2 bil 10-year Samurai bonds issued by Japan in 2019, according to former finance minister Lim Guan Eng.
With the bonds maturing in 2029, the Bagan MP explained that the federal government will pay approximately RM358 mil in interest over the 10-year period, benefiting from an interest rate of 0.53% and the yen’s depreciation.
“Malaysia will actually make a small profit based on the current yen rates,” Lim stated during a press conference at Parliament today.
“We will be paying RM6.26 bil, which means that we’ll earn around RM900 mil. After subtracting the interest payment of around RM358 mil, we should be earning more than RM500 mil.”
The Samurai bonds were yen-denominated bonds issued by the Japanese government to the Pakatan Harapan (PH) government, led by former premier Tun Dr Mahathir Mohamad, and were guaranteed by the Japan Bank of International Cooperation. Lim was the finance minister at the time of issuance.
In a parliamentary reply on Monday (July 15), the Finance Ministry revealed that it had spent RM192.1 mil on coupon payments as of March this year for the 200 bil yen (approximately RM7.2 bil) Samurai bonds.
The annual coupon rate is fixed at 0.53%, with coupons paid twice a year, in March and September.
The ministry noted that the ringgit’s appreciation against the yen since March 2022 has resulted in lower interest payments. The bond’s valuation also dropped to RM6.26 bil as of the end of March 2024. – July 18, 2024
