Indonesia’s Finance Ministry is considering issuing its first yuan-denominated government bonds (panda bonds) in 2026, the Financial Times reported, citing two sources.
The interest in panda bonds comes as Beijing promotes the use of its currency in international trade and finance to increase global influence and reduce dependence on the U.S. dollar.
Earlier this year, Brazil, Pakistan and Slovenia announced plans to issue panda bonds.
“From the perspective of international issuers, it provides more opportunities, broadens the investor base in the long term and helps lower the cost of financing for the country,” said OCBC Asia macroeconomic research head Tommy Xie. – “People want to move away from the dollar and look at other markets.
Panda bonds have become increasingly popular since 2023, thanks to Beijing’s regulatory reforms and lower financing costs. In 2024, panda bond issuance reached a record 195 billion yuan ($27 billion), according to Wind. However, it still represents only a fraction of China’s debt market.
Panda bond issuance is expected to grow significantly in the coming years and will be an important factor in the globalization of the yuan, the Institute of International Finance (IIF) said in a report earlier this year.
Analysts also forecast the issuance of “dim sum” (bonds denominated in yuan but issued outside mainland China, mainly in Hong Kong) to rise to a record this year. Specifically, Indonesia issued its first such bonds worth 6 billion yuan in October and plans to continue issuing “dim sum” next year, sources told the FT.
