Pakistan FM Aurangzeb hints at issuing Panda bonds in yuan to tap into China’s extensive capital market

Pakistan Finance Minister plans to issue Panda bonds in yuan to tap into China's capital market, diversify funding sources.

Pakistan Finance Minister Muhammad Aurangzeb hinted that the debt-ridden country may issue Panda bonds in yuan this year to tap into China’s extensive capital market, according to a media report.

Speaking in an interview with China’s CGTN during the Boao Forum for Asia, Mr. Aurangzeb said Pakistan was ready to engage the Chinese interbank bond market after previously issuing debt only in Western markets, The Express Tribune newspaper reported on Thursday (March 27, 2025.)

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“I have been advocating and I am very keen that Pakistan... go for an inaugural Panda bond,” he said. “We are very hopeful that during this calendar year, we will do that.” Panda bonds are Yuan-denominated debt instruments issued by foreign entities in China. They offer an opportunity to attract investment from Chinese financial institutions including banks, asset managers and insurers.

Mr. Aurangzeb noted that while Pakistan had experience with issuing dollar and euro bonds, this would mark its first entry into the Chinese debt market. The move is part of a broader effort to diversify funding sources and reduce reliance on Western markets.

The government is seeking to bolster its foreign exchange reserves and stabilise its economy after recovering from a prolonged economic crisis that nearly pushed the country into sovereign default two years ago. In January, the Finance Minister said the Panda bond issue would target around $200 million.

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