Bank Negara Malaysia/Bloomberg
Malaysia’s finance minister said that the country’s Hope Fund has been exhausted as the government used all MYR 205 million ($49 million) it raised from the public to pay off some of 1Malaysia Development Bhd’s (1MDB) debt, reported Bloomberg.
The Finance Ministry set up Tabung Harapan (the Hope Fund) following a shock election victory in May 2018 by a coalition led by Prime Minister Mahathir Mohamad. The fund drew contributions from Malaysians as well as businesses eager to help after the government said the country’s debt was higher than previously disclosed by the previous administration.
Lim Guan Eng, the Malaysian Finance Minister, said that the fund collected MYR 202.7 million in donations and MYR 2.8 million in interest as of January. The finance minister added that debt at the troubled state fund, 1MDB, is currently about MYR 50.5 billion.
Around MYR 144 million from the fund went to pay the interest on 1MDB’s Islamic medium-term note Sukuk in May 2019. The government used the remaining MYR 61.7 million from the Hope Fund to offset another interest payment on the same bond. The remainder MYR 82.07 million for the November 2019 coupon was paid using funds from the recovery of 1MDB assets, which has amounted to about MYR 1.45 billion, said Lim.
Lim said that the government is committed to pay all the loan obligations that were inherited by the previous administration, adding that it has or will cost MYR 13.9 billion to pay the debts of 1MDB and SRC International through 2020.