Federal Minister for Finance and Revenue Muhammad Aurangzeb has expressed eagerness to tap Chinese investors by selling as much as $300 million in Panda Bonds for the first time ever this year. 

Panda Bonds are yuan-denominated instruments sold in China by offshore issuers, including companies, multilateral agencies and governments. The market has drawn issuers including Egypt and Hungary, thanks to its lower cost of borrowing. Growth in Panda bond issuance could easily double in 2024, from about 103.35 billion yuan ($14.3 billion) last year, according to Bloomberg Intelligence.

The remarks came Friday during an interview with Bloomberg, the minister said, selling Yuan-denominated debt would allow Pakistan to diversify its funding sources and reach investors in a new market, Muhammad Aurangzeb.

It’s something “we should have looked at quite frankly some time back,” he said. 

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 dollar 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. 

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. 

“I don’t really see a huge pressure on the rupee at this point in time,” he said. 

“As we go forward, I think it’s going to remain range bound around these levels.” 

The “wildcard” is oil prices, he added, which remain uncertain given the Red Sea attacks. Pakistan’s rupee is up 1.3% this year, according to local pricing compiled by Bloomberg, among the best-performing currencies in Asia. 

According to Bloomberg report, Aurangzeb’s most pressing challenge is negotiating new loans with the International Monetary Fund (IMF) to help bolster the country’s reserves right after the current bailout program ends in April. 

The publication quoted IMF as having said earlier this week that Pakistan has expressed interest in a new medium-term program to improve its fiscal and external weaknesses and strengthen its economic recovery. 

According to the report, Aurrangzeb said Pakistan will seek a new loan program from the IMF of at least three years, as the country’s standby $3 billion arrangement with the global lender expires on April 11. 

Further details will be discussed after the Washington-based lender’s annual spring meetings, he said. 

While addressing a media briefing, the finmin said that Pakistan will discuss an Extended Fund Facility (EFF) with IMF next month

“We have expressed our strong interests in an EFF with the IMF, but the quantum is not clear yet,” Aurangzeb said.