Pakistan to sell $300 mln Panda bonds in Chinese market, says finance minister

Pakistan has decided to sell $300 Panda bonds in Chinese markets, announced Finance Minister Muhammad Aurangzeb in an interview with Bloomberg on Friday.

China has the “second-largest and deepest bond market in the world” and it is the “right thing to do for the country” to tap the market, given Pakistan has already sold dollars and eurobonds, he said.

Aurangzeb said the initial Panda bond sale would be about $250 million to $300 million, which would be followed by further issuances.

A former banker from JPMorgan Chase & Co., Aurangzeb, 59, was picked as finance minister by Prime Minister Shehbaz Sharif in March after a contentious election.

He takes office at a time when economic pessimism in the country is at a record high and the government is trying to avoid defaulting on its debt. Pakistan has the highest inflation rate in Asia of more than 20% and faces $24 billion of external debt payments in the fiscal year starting July, three times its foreign-exchange reserves.

The finance minister said the government’s cash balances are strong enough that it’s able to pay its debts on time. The payments are unlikely to put pressure on the currency, and he expects the rupee to remain stable, he said.