Finance Minister Muhammad Aurangzeb hinted that Pakistan may issue Panda Bonds in Yuan this year to tap into China’s extensive capital market.

Speaking in an interview with China’s CGTN during the Boao Forum for Asia, Aurangzeb said Pakistan was ready to engage the Chinese interbank bond market after previously issuing debt only in Western markets.

“I have been advocating and I am very keen that Pakistan… go for an inaugural Panda bond,” he said. “We are very hopeful that during this calendar year, we will do that.”

Panda bonds are yuan-denominated debt instruments issued by foreign entities in China. They offer an opportunity to attract investment from Chinese financial institutions including banks, asset managers and insurers.

Aurangzeb noted that while Pakistan had experience with issuing dollar and euro bonds, this would mark its first entry into the Chinese debt market.

The move is part of a broader effort to diversify funding sources and reduce reliance on Western markets.

The government is seeking to bolster its foreign exchange reserves and stabilise its economy after recovering from a prolonged economic crisis that nearly pushed the country into sovereign default two years ago.

In January, the finance minister said the Panda bond issue would target around $200 million.

His announcement comes after major credit agencies upgraded Pakistan’s sovereign ratings, enhancing the country’s prospects of returning to global bond markets.

The finance chief added that Pakistan was leveraging its improved macroeconomic indicators and looking to build deeper financial ties with Beijing.