PAK FM Aurangzeb hints about issuing panda bonds to take advantage of China’s wide capital market | World News
Pakistan’s Finance Minister Muhammad Aurangzeb has hinted that debt-indebted countries may issue panda bonds in the yuan this year to take advantage of China’s wide capital markets.
Express Tribune newspaper reported that in an interview with China’s CGTN at the Asian BOAO Forum, Auranzeb said that Pakistan was preparing to contact the Chinese interbank bond market after previously issuing debts in the Western market only.
“I’ve been advocating, and I’m very passionate about Pakistan…going to the first Panda Bonds,” he said. “We really hope that in this calendar year, we will do that.” Panda Bonds are dollar debt instruments issued by foreign entities in China. They offer opportunities to attract investments from Chinese financial institutions, including banks, asset managers and insurance companies.
Although Pakistan has experience issuing U.S. dollar and euro bonds, it will mark its first entry into the Chinese debt market, Aurangzeb pointed out. The move is part of a broader effort to diversify funding sources and reduce dependence on Western markets.
The government is seeking to strengthen its foreign exchange reserves and recover from a prolonged economic crisis and stabilize its economy, which almost pushed the country toward a sovereign default two years ago.
In January, the Finance Minister said the target for the issuance of panda bonds was about $200 million.
His announcement comes after major credit institutions upgraded Pakistan’s sovereign ratings, increasing the country’s prospects for returning to the global bond market.
The financial chief added that Pakistan is leveraging its improved macroeconomic indicators and hopes to establish deeper financial ties with Beijing.
