Malaysian state fund 1Malaysia Development Berhad (1MDB) has settled in full a RM2 billion (US$559 million) loan it owed local banks, its executive director Arul Kanda said today.

“The loan was settled in advance of the due date, per the terms of the loan facility agreement,” Kanda said in a statement emailed to Reuters.

The loan repayment should ease pressure on the ringgit and Malaysia’s credit outlook. The intensification of 1MDB’s troubles has increasingly been cited as a factor affecting Malaysia’s longer-term economic outlook.

1MDB, whose advisory board is chaired by Prime Minister Najib Abdul Razak, has amassed US$11.6 billion in debt as it built up a large portfolio of power plants.

Long dogged by controversy over its debt 1MDB’s woes increased when it missed payments on a bridge loan that was originally due at the end of December. The fund was given a final deadline of Feb 18 to pay the loan, local media reported.

“With the settlement of this loan, I reaffirm 1MDB’s commitment to continue meeting all our debt obligations as they become due,” said Kanda.

The loan was owed to the country’s largest bank Malayan Banking Bhd, smaller lender RHB Capital Bhd and others.

Reuters reported on Tuesday that Malaysian billionaire Ananda Krishnan was preparing to settle the US$550 million loan owed by 1MDB in a reprieve for the fund.

The fund appointed a new CEO in January and announced plans for a strategic review. It is also looking at selling some of its property assets, people familiar with the matter have told Reuters.

- Reuters