Japan to lend Malaysia $1.8b

Japan to lend Malaysia $1.8b

KUALA LUMPUR (Reuters): Japan is considering a request from Malaysia for a yen loan of US$1.8 billion, visiting Japanese Minister of International Trade and Industry Kaoru Yosano said on Tuesday.

He said Japan considered capital controls imposed by Malaysia earlier this month acceptable as emergency measures.

Yosano said he met Prime Minister Mahathir Mohamad and Minister for Special Functions Daim Zainuddin as part of his tour of Southeast Asia

"I told Mahathir that Japan was going to dispatch the OECF (Overseas Economic Cooperation Fund) team to discuss this matter (of a loan) on the basis of the outcome of the feasibility study," the minister said.

He did not say when Malaysia had made the request, but added that the projects were in the infrastructure sector and included a pipeline and a power plant project.

He said the OECF team would examine each project for its viability. "In principle, we are saying...that we are trying to reach an agreement (on the loan)," he said.