No strings attached with yen credit, says PM

The Japanese government isn’t imposing any conditions on its loan to Malaysia, says prime minister Dr Mahathir Mohamad.

"There are no strings attached," he told media after giving a special keynote address at World Chinese Economic Forum today.

"The yen credit can be used to repay loans or spent on projects," he said.

He was asked if the Japanese government had asked for projects in Malaysia in exchange for yen credit, like the East Coast Rail Link (ECRL), whereby a loan had been given by China in exchange for the east coast project being awarded to a Chinese developer.

This week, in his third visit to Japan since returning to the helm, Mahathir said Japan has offered to guarantee 200 billion yen (RM7.4 billion) in samurai bonds with a 10-year tenure.

Mahathir also said the Japanese government would be ready to consider providing support to resolve Malaysia's financial problems if necessary.

In the 2019 Budget presented last Friday, Finance Minister Lim Guan Eng said the offer was made due to the Japanese government's confidence in the administration and leadership of Mahathir.

The yen-denominated bonds, to be guaranteed by Japan's Bank of International Cooperation at an indicative coupon rate of 0.65 percent, are expected to be issued before March next year.

In his immediate reaction after the tabling of the 2019 Budget, Mahathir said the bonds would be used to retire some of the costly loans taken by the previous government.

Meanwhile, Mahathir also said Malaysia will learn from the Japanese railway company JR Kyushu in how to manage the country's transportation. - Mkini