JAKARTA - The Indonesian government will issue yuan-denominated bonds or Panda Bonds in the Chinese financial market worth 1 billion US dollars on July 23, 2026.
Minister of Finance Purbaya Yudhi Sadewa said the issuance of Panda Bonds was a strategic step for the government to expand sources of financing while opening access to the Chinese bond market which has large liquidity.
"The issuance plan is July 23. The target is 1 billion US dollars because this is a new market, we will explore it first. Even though the offering or bid may be very large, we will limit it to 1 billion US dollars first," he said in a press conference for the APBN KiTa, Tuesday, July 22.
According to Purbaya, if investor interest in the initial issuance is high, the government does not rule out the possibility of re-issuing Panda Bonds with a larger value in the next few months.
He also revealed that Indonesia had just obtained an AAA credit rating with a stable outlook from Lianhe Credit Rating, one of the leading rating agencies in China.
"There it was carried out by Lianhe Credit Rating. We came out with a report giving a stable AAA rating. So AAA is the highest in China, our debt rating is the top, right, right, right" he said.
Purbaya assessed that the Chinese bond market has great potential because it is supported by abundant liquidity, and so far, China is known as one of the largest investors in the global bond market.
"China is a big market for bonds. They used to have government bonds of more than 3 trillion US dollars. Now it has dropped to close to 1 trillion US dollars, but it is clear that their market is very promising and the capital there is very large, so with this AAA rating we should not be too difficult to issue bonds there," he said.
Furthermore, Purbaya explained, Lianhe gave Indonesia the highest rating because it was supported by a number of strong economic fundamentals, including economic growth that has remained above 5 percent since 2022 and is expected to continue in 2026-2027 thanks to the effectiveness of government policies.
In addition, Indonesia is considered to have a solid economic foundation as a country with the largest economy in Southeast Asia, good resilience to external shocks, and inflation that remains under control.
Lianhe also considers Indonesia's low foreign debt supported by strong payment capabilities through adequate foreign exchange reserves, and on the fiscal side, the government debt ratio of around 40 percent of gross domestic product (GDP) is considered to reflect a healthy fiscal sustainability.
Purbaya assessed that the high interest of Chinese financial institutions to be involved in the issuance of Panda Bonds reflects the high confidence of investors in Indonesia's economic prospects.
In the process of issuing the Panda Bond, the government appointed Bank of China as the lead underwriter.
Meanwhile, ICBC, CITIC, CICC, and DBS acted as joint lead underwriters as well as joint bookrunners.
Meanwhile, Agricultural Bank of China (ABC), China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC), and China Merchants Bank acted as co-managers.
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