Pakistan Soon to Access Chinese Capital Market

Government Officials announced today to access Chinese capital markets through its first “Panda Bond” issuance next week, Finance Minister Muhammad Aurangzeb said on Saturday, as the country seeks to strengthen external financing amid rising energy import costs linked to the Iran war and disruptions around the Strait of Hormuz.

Pakistan, which relies heavily on imported fuel and liquefied natural gas (LNG), has faced mounting pressure on its external account since the conflict disrupted regional energy routes earlier this year with price hikes in fuel and gas.

The present administration in Pakistan is trying to stabilize the economy under an International Monetary Fund (IMF) program while managing higher oil import costs and maintaining foreign exchange reserves.

“God willing, next week you will hear the good news that for the first time we can access Chinese capital markets through Panda Bond,” Aurangzeb said during a televised news conference with Petroleum Minister Ali Pervaiz Malik.

The remarks came a day after the IMF executive board approved two loan disbursements worth about $1.32 billion for Pakistan under its ongoing support programs, which was a relief in the efforts of present government.

Aurangzeb said Pakistan expected its foreign exchange reserves to reach a level equivalent to three months of import cover by the end of June, while stressing that the government remained focused on maintaining macroeconomic stability despite regional uncertainty.