Indonesia is exploring the issuance of so-called “panda bonds” debt securities denominated in Chinese renminbi and sold in mainland China as Beijing encourages wider international use of its currency, officials said Tuesday.
The move would make Indonesia one of the few Southeast Asian nations to tap China’s domestic bond market, potentially deepening financial ties between the two countries. Analysts say the plan reflects both Indonesia’s bid to diversify its funding sources and China’s efforts to expand the renminbi’s global footprint amid ongoing dollar volatility.
LATEST: Indonesia plans to issue panda bonds next year, aligning with China’s push to expand the yuan’s global role, per the FT. pic.twitter.com/kXeoWXgWq0
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The proposed issuance is under discussion between Indonesia’s finance ministry and the People’s Bank of China, according to local reports. Panda bonds could help Jakarta finance infrastructure and green energy projects while accessing lower borrowing costs in yuan markets.
The consideration comes as China continues promoting renminbi settlement across Asia, part of its long-term strategy to challenge the dominance of the U.S. dollar in regional trade and finance.
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