Pakistan’s Finance Minister Muhammad Aurangzeb has announced that the country plans to issue Panda Bonds worth $300 million this year to tap into the Chinese market. In an interview with Bloomberg, the minister stated that China is the world’s second-largest bond market and that Chinese investors can take advantage of Panda bonds. Initially, bonds worth $250 million to $300 million will be issued, and the volume of Panda bonds will be enhanced at a later stage. The minister also added that the government’s cash balances are strong enough to pay its debts on time, indicating that the country is heading in the right direction towards economic stability.

Aurangzeb expressed confidence that the Pakistani rupee will remain stable and that the payments are unlikely to put pressure on the currency. The Finance Minister also stated that Pakistan will go for an IMF programme with a duration of at least three years. Additionally, he expressed confidence that the growth rate will be better in the next financial year.

On Thursday, Prime Minister Shehbaz Sharif said that macroeconomic stability in Pakistan would not be possible without another loan from the IMF. During the Special Investment and Facilitation Council’s apex committee, he stated that the government would have to work towards a medium-term programme lasting two-to-three years. The premier added that the government will have to undertake deep-rooted structural reforms during those years. These remarks came after the government and the IMF signed a staff-level agreement paving the way for the payment of a final tranche of $1.1 billion next month, which would successfully complete the $3 billion loan short-term loan programme agreed last year.

The IMF has already confirmed that Pakistan is seeking a 24th medium-term bailout package, and negotiations for a fresh loan are expected to begin soon.

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