JAKARTA - The government has decided to postpone the issuance of Panda Bonds, a Yuan-denominated debt instrument to be issued in the Chinese financial market in early July 2026, to the end of July 2026 following high investor interest.
Minister of Finance Purbaya Yudhi Sadewa said the decision was made after he made a working visit to China and met with a number of prospective investors.
In the meeting, Purbaya explained, many investment managers and large banks in China admitted that they only knew about the plan to issue Panda Bonds, so it took additional time to get approval from their respective investment committees.
"So, they asked us to step back a little so that they have time to submit their proposals to their investment committee. I think it's good, it means that the interest is big, so I'm postponing it until the end of July," he said in a media briefing, Friday, June 26.
Purbaya revealed that a number of leading financial institutions in China, including Exim Bank, have expressed their interest in investing in the instrument.
"So, if it's big, I can absorb as much as possible according to our plan or more than our plan. So, the animation is quite big, investors like it very much, are enthusiastic when they meet them and it seems like they want to invest big yes," he said.
According to Purbaya, the issuance of Panda Bonds is part of the government's strategy in expanding sources of financing while reducing dependence on the US dollar.
Later, he continued, the transaction will be carried out using the Local Currency Transaction (LCT) scheme.
Purbaya explained that through this mechanism, investors will pay bonds using the renminbi currency, and, through cooperation between the central banks of the two countries, the funds will be converted so that the Indonesian government receives payment in rupiah.
"I have this plan, once it is sold, I will activate or use the LCT channel, Local Currency Transaction, where they pay renminbi. Later, let the central bank go through certain mechanisms with our central bank. I immediately receive rupiah. So, our dependence on the dollar will be less and will reduce pressure on the rupiah," he explained.
Purbaya added that investors in China tend to make the results of domestic rating agencies as the main reference compared to international rating agencies such as S&P and Moody's.
He said the results of the Panda Bond ranking would be announced a few days before the issuance and were expected to receive an excellent rating.
"They will see what the rating of China is like, and Panda Bonds are rated by rating agencies from China. Later it will be published a few days before the Panda bond is sold. The result is, we already know it's pretty good," he said.
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