Pakistan announces to launch renminbi-denominated Panda Bond

  • Pakistan cabinet on December 25, 2018 first time approved launching of Panda Bond in Chinese-denominated Yuan currency.
  • According to the Pakistani media, the possible transaction size will be equivalent to $500 million in two different tranches in order to finance its yawning trade deficit with China.
  • Pakistan’s trade deficit with China stood at around 12 billion dollars per annum and it is asking for Asean level tariff reduction on its exportable items.  
  • Through this bond, Pakistan to raise loans from China’s capital markets, as the country moved a step forward to give the Chinese currency a status at par with the US dollar.
  • As per the Pakistani Government, the Panda bonds will help the government diversify investor base of capital market issuance and provide a source of raising Renminbi.
  • The Philippines has also raised RMB1.46 billion through renminbi-denominated bonds. 
  • After United States and Japan, the China’s bond market is the third largest in the world  and has an estimated market size of $11.8 trillion. The Panda bonds, Yuan-denominated debt issued by foreign borrowers, make up a small fraction of China’s $11 trillion dollar onshore bond market.

Written by 

Leave a Reply

Your email address will not be published. Required fields are marked *