KARACHI: Pakistan is aiming to launch its first-ever Panda bond — a yuan-denominated bond issued in China’s domestic market — in January, as the government looks to diversify external funding sources and strengthen debt sustainability under ongoing economic reforms, the finance ministry said on Friday.
The planned issuance would mark Pakistan’s debut in China’s onshore bond market and comes as Islamabad seeks alternatives to dollar-denominated borrowing amid tight global financial conditions and continued reliance on multilateral support.
Panda bonds are renminbi-denominated instruments sold to Chinese investors by foreign governments or companies, offering issuers access to China’s deep domestic capital markets while reducing exposure to foreign-exchange volatility.
“The Panda Bond program is being pursued as a structured and programmatic financing strategy, aligned with prudent debt management objectives,” the finance ministry said in a statement after Finance Minister Muhammad Aurangzeb chaired a review meeting on the planned issuance.
The ministry said Pakistan envisages a Panda bond program of around $1 billion, with an inaugural tranche equivalent to $250 million, subject to final regulatory approvals from Chinese authorities expected by early January. It added that preparatory work for subsequent issuances under a second phase of the program has already begun.
