The Minister of Finance Muhammad Aurangzeb suggested that Pakistan could issue Panda obligations in Yuan this year to exploit the vast Chinese capital market.
Speaking in an interview with the Chinese CGTN at the Boao forum for Asia, Aurangzeb said that Pakistan was ready to initiate the Chinese interbank bond market after having expressed debt only on Western markets.
“I recommend and I am very lively that Pakistan … opt for an inaugural panda link,” he said. “We hope that during this calendar year, we will do it.”
Panda bonds are debt instruments labeled in Yuan issued by foreign entities in China. They offer the opportunity to attract investments from Chinese financial institutions, including banks, asset managers and insurers.
Aurangzeb noted that if Pakistan had experience in the issue of dollar bonds and euros, this would mark its first entry into the Chinese debt market.
This decision is part of a broader effort to diversify sources of funding and reduce dependence on Western markets.
The government seeks to strengthen its exchange reserves and stabilize its economy after recovering from an prolonged economic crisis which almost pushed the country to a sovereign defect two years ago.
In January, the Minister of Finance said that Panda bond issues would target approximately $ 200 million.
Its announcement comes after the main credit agencies have improved the sovereign notes in Pakistan, improving the country’s prospects to return to the global bond markets.
The finance chief added that Pakistan took advantage of its improved macroeconomic indicators and sought to establish deeper financial links with Beijing.
