Pakistan plans repeat panda bond issuance and eyes Japan market
Pakistan plans to return to China's domestic bond market for further yuan-denominated borrowing and is exploring the possibility of issuing yen-denominated bonds in Japan, Finance Minister Muhammad Aurangzeb said in an interview with Nikkie Asia, as the government seeks to diversify its funding sources.
Pakistan issued its first panda bond worth 1.75 billion yuan ($261 million) in mid-May under a 7.2-billion-yuan programme, with partial guarantees from the Asian Development Bank and the Asian Infrastructure Investment Bank. Panda bonds are yuan-denominated bonds issued by foreign governments or institutions in China. Aurangzeb said the recent panda bond would not be a one-time issuance, and that Pakistan intended to keep going back and be a repeat issuer, given how China is the second largest and deepest capital market in the world.
Beyond China, the finance minister expressed interest in exploring the Japanese capital markets, including the issuance of yen-denominated samurai bonds. A samurai bond is a yen-denominated bond issued in Tokyo by a non-Japanese company, government, or supranational organisation, and governed by Japanese financial regulations. He said such issuance would make sense and was something that should be thought through, adding that more homework was needed.
The plans come as Pakistan continues its recovery from a period of severe economic turmoil exacerbated by the COVID-19 pandemic, supported by a $7 billion, 37-month International Monetary Fund loan programme known as the Extended Fund Facility, signed in 2024, which includes tough measures such as raising tax revenue on farm income. The country is moving from macroeconomic stabilisation towards sustainable, investment- and export-led growth while advancing structural reforms and strengthening engagement with international capital markets and development partners.
Aurangzeb departed for Bangkok, Thailand, last week to lead Pakistan's delegation to the World Bank Group–IMF Annual Meetings 2026, scheduled to be held from October 12 to 18, 2026. During the visit he will represent Pakistan at key IMF and World Bank Group events and undertake an extensive programme of over 60 high-level engagements with international financial institutions, finance ministers and policymakers, development partners, global investors, banks, credit rating agencies, think tanks and international media.
