KUALA LUMPUR: Malaysia would make a small profit out of the issuance of Samurai bonds in 2019 due to the depreciation of the Japanese yen, said former finance minister Lim Guan Eng (PH-Bagan).
"If we look at the period of five years (since the bonds were issued), the bonds are worth RM7.2 billion and the interest (paid) is RM192.1 million with a 0.53 per cent rate annually.
"Over a 10-year period when the bonds mature, the total interest that will be paid is RM358 million and this means that the government will profit from the issuance of bonds due to foreign exchange.
"Based on the current yen (rate) now, we'll be paying RM6.26 billion. This means we will earn around RM900 million.
"(And when) you take the interest payments made of RM358 million, we should be earning more than RM500 million as a result of the issuance of the Samurai bonds," he said in a press conference in Parliament, today.
On Tuesday, Prime Minister Datuk Seri Anwar Ibrahim said 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.
Anwar, who is also the Finance Minister, said the yen-denominated bonds carry an annual interest rate of 0.53 per cent. The government in 2019 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.
Lim, who was then the finance minister said, the oversubscription of the yen-denominated bond was a testament to confidence in the country's economy by various Japanese institutions and investors.