Indonesia's Panda Bond Debut Broadens Financing Sources, Economist Says

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TEMPO.CO, Jakarta - Indonesia's recent issuance of 7 billion yuan (1 yuan = Rp2,660) worth of Panda Bonds can diversify the government's financing sources, both from the market and investor perspectives. This was stated by Irman Faiz, lead economist at Bank Danamon Indonesia, to Xinhua on Monday, July 27, 2026, as cited by Antara.

The Indonesian government successfully secured new financing worth 7 billion yuan, or approximately US$1.033 billion (US$1 = Rp18,019), from its inaugural issuance of yuan-denominated government debt, Panda Bonds, on July 23.

This further demonstrates the strong appeal of the Chinese financial market to international financing, according to a statement on the social media account of Bank of China, the lead underwriter and lead bookrunner.

According to Irman, the issuance of Panda Bonds is a strategic move because it increases the diversity of Indonesia's financing sources. Given the volatility abroad, access to China's domestic bond market is considered to provide greater flexibility in managing financing needs.

"From a cooperation perspective, Panda Bonds deepen the integration of the Indonesian and Chinese financial markets by expanding the investor base, increasing access to renminbi liquidity, and supporting the use of local currencies in bilateral transactions," said Irman.

Irman added that the success of this initial issuance could provide initial capital for Indonesia to establish a presence in the mainland Chinese bond market. However, he advised that the frequency of government foreign exchange bond issuances remain based on financing needs and cost efficiency, not solely on high investor demand.

The Panda Bonds issued last week consist of two tenors: a three-year tenor with a nominal issuance of 5.6 billion Chinese yuan, and a five-year tenor with a nominal issuance of 1.4 billion Chinese yuan.

Both bonds were issued with coupons of 1.9 percent for the three-year tenor and 2.19 percent for the five-year tenor, respectively. The Panda Bonds issued in this transaction have also received an AAA (Stable) rating from China Lianhe Credit Rating Co., Ltd.

The Directorate General of Financing and Risk Management (DJPPR) of the Indonesian Ministry of Finance stated that the initial issuance of Panda Bonds received a positive response from domestic Chinese investors, as reflected in the bid-to-cover ratio of 2.4 times and the highest orderbook value of approximately 17 billion yuan.

Read: Indonesia Raises Rp18.5 Trillion in Debut Panda Bond Sale

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Indonesia Raises Rp18.5 Trillion in Debut Panda Bond Sale

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