Purbaya Targets USD1 Billion from Panda Bonds  

Beijing: Finance Minister, Purbaya Yudhi Sadewa, is targeting the issuance of USD1 billion worth of Panda Bonds.
 
“Our initial target is (in the ballpark of) USD 1 billion, but we will have to see how the market reacts. If the demand is stronger (than expected), (then) we will increase it, depending on market conditions,” remarked Purbaya in Beijing, as quoted by Antara, Friday, June 19, 2026.
 
The statement was made following a meeting with Chinese Finance Minister, Lan Fo'an, along with representatives from the People's Bank of China (PBOC), the Asian Infrastructure Investment Bank (AIIB), and other investors, during an official visit to China from June 16 to 19, 2026.
 
The Indonesian government is preparing to issue Panda Bonds to diversify international financing sources in a bid to stabilize and strengthen the Indonesian Rupiah (IDR).
 
Panda Bonds are debt securities issued by foreign governments, multilateral institutions, or companies in China's domestic bond market, denominated in the Chinese Yuan (CNY) or Renminbi (RMB), allowing them to be sold directly to mainland Chinese investors.
 
To issue the Panda Bonds, however, issuers must comply with the Chinese financial regulations set by the People's Bank of China (PBOC) and the National Association of Financial Market Institutional Investors (NAFMII).
 
“During the meeting with the PBOC, we were asked to expedite the issuance of the permit. However, the underwriter has yet to submit the application. The PBOC requested that the permit be submitted in due course so that they could proceed with the process. They have been very supportive of our plan,” explained Purbaya.
 
With the PBOC's support, Purbaya is optimistic that the Panda Bonds will be issued before the end of the year.
 
“Book building should begin next week once the permit is issued. We should have a decision in two weeks’ time,” said Purbaya.
 
Book building refers to the preliminary offering period, during which issuers and underwriters gauge investor interest and collect orders within a specified price range.
 
“Then we can see how much (interest in Panda Bonds) there is, we are eager to diversify our development funding sources as to not be massively influenced by a single currency,” noted Purbaya.
 
Purbaya also reminded audiences of Indonesia and China’s pre-existing bilateral agreement (local currency transactions) which facilitates transactions between the two countries.
 
“Transactions in yuan can be directly converted into rupiah because of the agreement between the Indonesian central bank and the Chinese central bank. We will explore whether we can utilize this bilateral swap agreement to help reduce pressure on the rupiah in the future," said Purbaya.
 

China’s Full Support

Purbaya spoke of an interesting discussion he had with Chinese Finance Minister, Lan Fo'an.
 
“The Chinese Ministry of Finance oversees many state-owned enterprises, including ones we approached (for investment). The ministry’s support will be crucial to the success of our bond issuance, and they have thus far been very supportive of our plan," stated Purbaya.
 
Panda Bonds will provide foreign governments and companies with access to the Chinese financial market, offering high liquidity and a broad investor base.
 
Proceeds from the Panda Bond issuance may be used to finance budgetary needs, infrastructure projects, investments, or other corporate requirements.
 
Panda Bonds are considered to offer several strategic advantages, including access to new financing sources beyond the US dollar- and euro-denominated bond markets.
 
They may also allow for more competitive funding costs than those in the global US dollar-denominated bond markets, enabling issuers to obtain funds at lower borrowing costs, and with a more optimal funding structure.
 
Panda Bonds could also help to reduce foreign-exchange risk. If a country has financing or trade needs related to China, using the yuan could help reduce dependence on the US dollar and mitigate the risk of exchange rate fluctuations. This could ultimately support the diversification of foreign exchange reserves and strengthen Indonesia’s economic and financial ties with China.
 
Lastly, Panda Bonds offer domestic Chinese investors greater portfolio diversity by providing exposure to international issuers without requiring them to exit their domestic financial market.
 
The popularity of Panda Bonds has grown in recent years as China continues its efforts to internationalize the yuan. This has prompted more governments and global companies to employ the instrument for funding.
 
(Jonathan Sianto)