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 is promoting the use of its currency in international trade and finance to increase global influence and reduce reliance on the US 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 Tommy Xie, head of macroeconomic research in Asia at OCBC. – “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 195bn yuan ($27bn), according to Wind. However, it still represents only a fraction of China’s debt market.
Panda bond issuance is expected to increase significantly in the coming years and will be an important factor in the globalisation of the yuan, according to a report by the Institute of International Finance (IIF) earlier this year.
Analysts also forecast the issuance of “Dom Sams” (bonds denominated in yuan but issued outside mainland China, mostly in Hong Kong) to rise to a record this year. Specifically, Indonesia issued its first such bonds worth 6bn yuan in October and plans to continue issuing dom-sam next year, sources told the FT.