Pakistan to issue first 'Panda bond' next week

(Patria) - Pakistan is expected to tap Chinese capital markets for the first time next week through yuan-denominated bonds, Finance Minister Muhammad Aurangzeb said yesterday, Reuters reported.

- God willing, next week you will hear good news that we will tap Chinese capital markets for the first time through 'Panda bonds' - he said at a press conference.

The $250 million issuance, the first of a planned $1 billion program, will be supported by the Asian Development Bank and the Asian Infrastructure Investment Bank.

Aurangzeb said Pakistan's economy is showing signs of recovery, including export and remittance growth, despite the war in Iran and the closure of the Strait of Hormuz, which put immense pressure on the country, which relies heavily on fuel and natural gas imports.

The finance minister's comments came after the International Monetary Fund disbursed about $1.32 billion in fresh funds from two loan disbursements under two ongoing programs.

Pakistan had considered eurobonds from other countries and commercial debt to replace a $3.5 billion loan from the United Arab Emirates and manage its foreign exchange reserves until Saudi Arabia provided an additional $3 billion in support to bridge a multi-billion dollar gap in its finances.