Pakistan Seeks to Increase Yuan Swap with China, Plans First Panda Bond
Pakistan Seeks 10 Billion Yuan Currency Swap with China to Say Goodbye to IMF. Pakistan formally requested China to increase its currency swap line by additional 10 billion yuan in latest bid to strengthen financial stability and eventually end its reliance on the International Monetary Fund (IMF).
The development was confirmed by Finance Minister Muhammad Aurangzeb who interacted with reporters at the conclusion of the IMF and World Bank spring meetings in Washington. Aurangzeb said Islamabad is moving forward with deep structural reforms. These include restructuring public sector companies and introducing significant changes to the pension system to ensure long-term fiscal health.
“We are committed to making this our last IMF program,” Aurangzeb said, highlighting the government’s aim for greater economic independence. He noted that recent reforms have already improved economic indicators and boosted private sector confidence.
Pakistan’s finance czar revealed that Islamabad requested to expand the existing 30 billion yuan currency swap with China to 40 billion yuan. He also confirmed plans to issue Pakistan’s first Panda bond — a yuan-denominated bond in China’s domestic market — before the end of 2025.
Positive talks have been held with the Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB) regarding providing credit enhancements for the Panda bond issuance. “We are diversifying our financing sources, and we’re optimistic about completing our first Panda bond transaction within this calendar year,” Aurangzeb said.
On IMF front, Aurangzeb mentioned that Pakistan expects Fund’s executive board to approve the pending Staff-Level Agreement in early May. This approval would not only endorse Pakistan’s participation in the $1.3 billion climate resilience initiative but also unlock a $1 billion disbursement critical for maintaining financial stability.
He stressed that Pakistan’s economy has shown steady improvement since securing the IMF deal in 2024, and that the government remains focused on sustaining this momentum.
Commenting briefly on regional tensions following recent incidents near the Indian border, Aurangzeb acknowledged the situation’s complexity but pointed out that trade between Pakistan and India had already declined significantly, with volumes dropping to just $1.2 billion last year.
