The federal cabinet gave the go ahead to launch the Panda Bonds in Yaun currency.
Panda bonds in Pakistan will be launched in Yaun, the Chinese currency. The federal cabinet announced the update as the strategy to raise the foreign exchange from the global markets. However, the size of the bond is not discussed at this stage.
PM Imran Khan chaired the federal cabinet meeting in which approval is given about the Panda Bonds. Dr Khaqan Najeeb, Official Spokesperson to Finance Ministry revealed that the bond is finalized after a long discussion with traditional financial advisers, investment groups, Chinese banks and regulatory authorities in China. However, it will help government to offer the source of raising renminbi or RMB and will diversify the investor base of capital market issuance.
According to sources, the size of Panda Bonds will be near $1 billion. However, the Chinese currency cannot be used to settle payments with other countries except China. In 2013, State Bank of Pakistan or SBP bought $1.5bn worth of Chinese yuan and sold them in far east forex markets for US dollars.