Pakistan Plans Panda Bonds to Boost Finances

Pakistan is set to issue yuan-denominated panda bonds this year, aiming to raise between $200 million to $250 million from Chinese investors within the next six to nine months, according to Finance Minister Muhammad Aurangzeb. This move is part of the government's strategy to strengthen its finances and tap into the Chinese capital markets, a step Aurangzeb described as long overdue. The plan comes as the country seeks to fulfill the conditions of a $7 billion loan agreement with the International Monetary Fund (IMF), which includes raising the tax-to-GDP ratio from 10% to 13.5%. The IMF is expected to visit Pakistan next month to assess progress, and Aurangzeb expressed confidence in achieving these targets. Pakistan's sovereign rating has recently seen upgrades from credit agencies, which may help the country regain access to global bond markets. The finance minister emphasized the importance of these financial reforms for the country's fiscal sustainability.