KUALA LUMPUR - Malaysia's Finance Minister Lim Guan Eng said the government will honour an interest payment on a 1MDB loan due by the end of this month.
The interest charge is owed to an Abu Dhabi fund as part of a resettlement package related to troubled state fund 1Malaysia Development Berhad, The Malaysian Insight news site said on Tuesday (Oct 9).
"We honour the commitments, the legal commitments, the legitimate commitments made by the previous government."
"Otherwise, Malaysia will be in default," Mr Lim told reporters after an event in Kuala Lumpur on Tuesday, as quoted by Malaysiakini news site.
Malaysiakini said the payment was understood to total RM211.31 million (S$70.5 million).
Mr Lim said the government will not default on the interest payments as there would be long-term consequences to the economy.
"We have taken advice from the Attorney-General that we have to honour the commitments, legally. Also because there is a financial consequence."
"If you default, then you will get an automatic downgrade on your ratings. And not just one level but probably much more than that," he said.