The Minister of Finance, Muhammad Aurengzeb, hinted that Pakistan can broadcast panda bonds in Yuan this year to take advantage of the extensive capital market of China.
Speaking in an interview with China’s CGTN during the Boao forum for Asia, Aurengzeb said that Pakistan was ready to involve the Chinese interbank bond market after issuing debts previously only in Western markets.
“I’ve been advocating and I am very interested in Pakistan … Looking for an inaugural link of Panda,” he said. “We have a lot of hope that during this calendar year, we will.”
Panda bonds are debt instruments called Yuan issued by foreign entities in China. They offer the opportunity to attract investments from Chinese financial institutions, including banks, asset and insurer administrators.
Aurengzeb said that, although Pakistan had experience in the issuance of dollar and euro bonds, this would mark his first entry into the Chinese debt market.
The measure is part of a broader effort to diversify financing sources and reduce the dependence of western markets.
The government is trying to reinforce its foreign exchange reserves and stabilize its economy after recovering from a prolonged economic crisis that almost pushed the country to the sovereign breach two years ago.
In January, the Minister of Finance said that the issuance of Panda bonds would be directed to around $ 200 million.
His announcement occurs after the main credit agencies improved the sovereign grades of Pakistan, improving the country’s perspectives to return to the global bond markets.
The Chief of Finance added that Pakistan was taking advantage of his improved macroeconomic indicators and seeking to build deeper financial ties with Beijing.
