Ringgit strengthens, Samurai bond debt reduces to RM6.26 Billion

KUALA LUMPUR: The amount of Samurai bonds, or Malaysia’s debt to Japan, has decreased to RM6.26 billion from RM7.2 billion (200 billion yen) at the end of March, due to the strengthening of the ringgit.

According to Berita Harian, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said that this amount reflects an exchange rate of RM3.1308 per 100 yen.

The strengthening of the ringgit against the yen has resulted in lower interest payments on the Samurai bonds made from March 2022 to March this year compared to the previous period.

“This strengthening of the ringgit also reduces the amount of debt to RM6.26 billion by the end of March 2024, taking into account the exchange rate of RM3.1308 per 100 yen,” he said in a written parliamentary reply.

He was responding to a question from Lim Guan Eng (PH-Bagan), who asked the finance minister to provide the status of the Samurai bond debt of 200 billion yen (RM7.3 billion) issued by Malaysia in 2019.

Guan Eng also inquired about the total payments made, the remaining debt, and the foreign exchange gains due to the depreciation of the yen.

At the same time, the finance minister noted that the federal government issued a 10-year Samurai bond amounting to 200 billion yen or RM7.2 billion, with an exchange rate of RM3.6217 per 100 yen, and an annual interest rate of 0.53 percent.

He explained that the interest on the Samurai bonds is paid twice a year, in March and September, and is subject to the exchange rate on the transaction day.

“From September 2019 to March 2024, the government has spent RM192.1 million on interest payments.

“The government will continue to fulfill its interest payment obligations on the Samurai bonds until this debt matures in March 2029, along with the repayment of the principal amount of 200 billion yen on the same day,” he said.

According to the finance minister, the issuance of Samurai bonds is a collaboration between the two governments.