FinMin says Panda bond to diversify funding, avoid overreliance on dollar
Business
Pakistan has said it aims to launch the Panda bond by January next year
ISLAMABAD (Web Desk) - Pakistan’s Finance Minister Muhammad Aurangzeb said on Tuesday that launching its first-ever Panda bond would allow Islamabad to diversify its external financing sources away from overreliance on the US dollar, the Finance Division said.
Pakistan has said it aims to launch the Panda bond— a yuan-denominated bond issued in China’s domestic market— by January next year. This highlights Pakistan’s efforts to find alternatives to dollar-denominated borrowing as global financial conditions tighten and Islamabad looks to escape a prolonged macroeconomic crisis.
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.
“He said the [Panda bond] issuance would allow Pakistan to tap into the second-largest and second-deepest capital market in the world, helping diversify funding sources away from overreliance on the US dollar by complementing existing access to euro and sukuk markets,” the Finance Division said.
Aurangzeb was speaking to the state-owned China Global Television Network (CGTN), the Finance Division said.
The finance minister acknowledged Pakistan had “previously underutilized” the opportunity to take advantage of the Panda bond, expressing optimism about investor interest in the Chinese market.
He said Pakistan remains hopeful of launching the bond ahead of the Chinese New Year, calling it a “landmark development” in the country’s external financing strategy.
In response to a question about Pakistan’s economic priorities, Aurangzeb identified agriculture, minerals and mining, artificial intelligence and digital economy as key areas where Islamabad could attract Chinese investment.
“He emphasised that beyond capital flows, this phase of cooperation places strong emphasis on knowledge transfer and technical support,” the Finance Division said.
