Malaysia's new central bank chief says he's confident the govt will honour debt obligations as 1MDB payment looms

Malaysia's new central bank governor Muhammad Ibrahim has expressed confidence that the government would honour all its debt obligations.
Malaysia's new central bank governor Muhammad Ibrahim has expressed confidence that the government would honour all its debt obligations.PHOTO: STAR PUBLICATIONS (M) BERHAD

KUALA LUMPUR (REUTERS) - Malaysia's new central bank governor said he was confident the government would honour all its debt obligations, as a deadline loomed on Wednesday (May 11) for troubled state fund 1Malaysia Development Berhad (1MDB) to make a coupon payment on a US$1.75 billion (S$2.4 billion) bond.

"I'm quite confident the government will honour all of its debt obligations," Muhammad Ibrahim told reporters at the sidelines of an event in Kuala Lumpur. "Also, with the resolution of 1MDB, it will improve market sentiments."

1MDB has to make a payment on a US$1.75 billion bond on Wednesday, but there was no indication yet on whether it would be paid.

Last month, 1MDB did not pay a US$50.3 million coupon on another US$1.75 billion bond, following a stand-off with Abu Dhabi sovereign fund IPIC, triggering cross-defaults on some of its other bonds.