KUALA LUMPUR (REUTERS) - Malaysia will honour all payments on debt raised by insolvent state fund 1Malaysia Development Berhad (1MDB), even though its new government is unhappy about money missing from the fund, the country's Finance Minister told reporters on Friday (May 25).

"We will honour those even though we are not happy with 1MDB, but we have to honour our international obligations," Mr Lim Guan Eng said.

"I think this will reassure the markets that this government knows what it is doing."

In a statement on Thursday, Mr Lim said the government has guaranteed RM38 billion (S$12.78 billion) of 1MDB's debt at the end of 2017.

The new government has made a priority of finding out how billions of dollars went missing from 1MDB, and anti-graft agents have quizzed former prime minister Najib Razak, who set up the fund a decade ago.

Datuk Seri Najib has consistently denied any wrongdoing, even though corruption allegations have swirled around him.

Mr Lim said earlier this week that the Najib government deceived the public and Parliament over the country's financial situation and 1MDB, and that it had been bailing out debt-burdened 1MDB since April 2017, paying a total of RM6.98 billion so far.