WB delays loan to Malaysia

WB delays loan to Malaysia

KUALA LUMPUR (AFP): Malaysian Prime Minister Mahathir Mohamad said Thursday that the World Bank was delaying a loan to Malaysia because of confusion over Kuala Lumpur's recently introduced capital controls.

"Yes, they are delaying (the loan) because they are not sure what is meant by currency control," Mahathir told reporters.

"They think we are cutting off from the rest of the world. This is not true. We will explain to them," he said.

Reports said that the World Bank would delay lending $1.7 billion to overhaul the country's financial system, supplement government spending and improve education and health care.

A World Bank official was reportedly talking to the Malaysian government about the loan plan.

Mahathir announced sweeping capital controls on Sept. 1 to insulate the battered Malaysian economy, including a fixed exchange rate and plans to abandon the convertibility of the ringgit starting Oct. 1.