Guan Eng: Malaysia set for RM1.6b windfall from 2019 samurai bond

 

Lim Guan Eng speaks during a press conference after the tabling of Budget 2020 at Parliament in Kuala Lumpur on October 11, 2019. — Picture by Shafwan Zaidon

KUALA LUMPUR, March 15 — Malaysia is poised to record a RM1.6 billion profit from its 2019 samurai bond issuance, thanks to the significant depreciation of the Japanese yen against the ringgit.

Former finance minister and Bagan MP Lim Guan Eng revealed today that the 200 billion yen (RM7.2 billion) bond, which was heavily debated when it was first issued during the Pakatan Harapan administration, has effectively become a major foreign exchange gain for the country.

Citing a parliamentary reply from Finance Minister Datuk Seri Anwar Ibrahim dated March 2, Lim said that while the bond remains active until 2029, the crash in the yen’s value has significantly reduced the amount Malaysia is required to pay back in ringgit.

When the 10-year bond was successfully issued in March 2019, it carried a low coupon rate of 0.53 per cent annually.

At the time, the exchange rate stood at RM3.62 for every 100 yen. However, by the end of December 2025, the yen had depreciated by 27.8 per cent, falling to RM2.59 for every 100 yen.

“Due to the depreciation of the yen against the ringgit, the principal value of the samurai bond has been reduced to the current value of RM5.2 billion, compared to the original issuance value of RM7.2 billion,” Lim said in a statement.

This shift results in a massive foreign exchange gain of RM2 billion on the principal alone.

Lim said that this RM2 billion gain comfortably covers all interest costs associated with the debt, which is estimated to be around RM400 million. - malaymail