Pakistan to Tap China Debt Market With First Yuan-Priced 'Panda' Bonds
Pakistan is preparing to sell its first yuan-denominated 'panda' bonds inside China's onshore debt market in a bid to widen its investor base. Islamabad is leaning on Chinese-currency funding as dollar borrowing costs remain elevated.
Pakistan's Ministry of Finance says preparations for the country's first yuan-denominated bond issuance inside China are in their final stages. According to the South China Morning Post, the deal awaits final approvals from the People's Bank of China and the syndicate of underwriting banks.
Known as a 'panda bond', the structure lets non-Chinese issuers tap savers and institutions in Shanghai and Beijing directly. Islamabad describes yuan-denominated funding as a useful diversification tool while dollar bond costs remain elevated by tight global financial conditions.
Analysts say the initial size will probably be modest, but a successful debut could ease balance-of-payments pressure on the country. The issuance would also offer a fresh reference point for the rising role of the yuan as a regional financing currency in Asia.
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