Pakistan Plans Yuan Market Entry With First Panda Bond in January
Pakistan plans a yuan market entry with its first Panda bond in January.The government wants to raise $250 million in the first phase.
This move marks a shift from traditional global borrowing.Officials say the plan avoids Eurobonds and Sukuk this year.
Instead, leaders aim to tap China’s local debt space.As a result, funding sources become more diverse.
Why the Panda Bond Matters
The bond should launch by mid January 2026.
The Prime Minister’s Office approved the plan before January ends.In addition, a second phase may raise $500 million by June.Senior officials expect an interest rate near four percent.
That rate stays lower than recent global options.
Therefore, costs may remain manageable.
Pakistan faces heavy external repayments this year.One $500 million payment cleared in September 2025.Another $1.3 billion payment falls due in April 2026.
IMF Questions, Government Responds
However, the IMF raised concerns over the strategy.It questioned reliance on Chinese buyers.
The Fund asked why commercial borrowing was not chosen.Pakistani officials offered a clear response.They stressed diversification over dependence.For example, deeper ties with China can widen options.The government also wants visibility in China’s capital system.
A local currency instrument supports that goal.
As a result, long term access may improve.
Analysts see this as a cautious but smart move.It spreads risk across regions.It also signals confidence to regional investors.
