“There is a policy under the present government that it will reduce foreign borrowings as much as possible while focusing on raising local debt. If it’s necessary to take foreign loans, only low-interest loans are given priority,” he told The Myanmar Times Sunday.

During a Parliament session last Friday, Minister for Planning and Finance U Kyaw Win said Myanmar has foreign debts totaling some $9.6billion as at September 30, 2017, which is slightly higher than the total amount of foreign debt the present government inherited from former president U Thein Sein’s administration on March 31, 2016.

Japan is among Myanmar’s top lenders as interest rates on Japanese debt are low. “The rate for Japanese loans is just 0.01 percent per year, which aligns with our priority of accepting cheaper foreigner loans,” U Khin Cho said.

In the 2016-17 fiscal year, the government borrowed $1.1billion from Japan International Cooperation Agency (JICA) to implement six projects, according to a report on foreign debts submitted to parliament. During that year, Myanmar accepted the most loans from Japan among all its other creditors.

As a whole, China tops the list of Myanmar’s foreign creditors. Myanmar still owes more than $3.8 billion to China compared to $2.1 billion to Japan. Under U Thein Sein’s government, Myanmar accepted a loan from China’s EXIM Bank totalling $400million at an interest rate of 4pc. The loan, which was taken between 2013 and 2014, was channeled to farmers and other companies in the agricultural sector.

As at September 30, 2017, Myanmar’s local and foreign debts totaled K32.5 trillion.

Source: https://www.mmtimes.com/news/government-accept-only-low-interest-foreign-loans-debts-rise.html