Government to issue Panda bond in Chinese Currency

December 28, 2018 (MLN): The federal cabinet on Thursday approved the issuance of Panda Bond in Yuan in order to finance its widening trade deficit with China.

The Panda Bonds will help government diversify investor base of capital market issuance and provide a source of raising Renminbi.

The possible transaction size of the bond is equivalent to $500 million to $1 billion in different tranches. At least one tranche is expected during the current fiscal year.

Finance Minister Asad Umar told the federal cabinet that the interest rate may range above 5.5% but the final price can only be determined at the time of issuance of the bond.

Dr. Najeeb Khaqan, the spokesperson for the Finance Ministry, said that government successfully continues its efforts for building foreign exchange reserves and bridging foreign financing needs, and the approval of Panda bond by the cabinet after several rounds of discussions with Chinese banks, investment group and regulatory authorities was the part of this effort.

The spokesperson said that the bonds will be issued in several rounds and a good response is expected, considering the interest shown by Chinese banks and investment groups.

The official said that the government decided to move ahead with RMB-based Panda Bond for using this tool for repayment to Chinese loan as well as for financing the trade deficit.

Copyright Mettis Link News

Posted on: 2018-12-28T10:40:00+05:00

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