December 5 BR report: Government began negotiating 15 billion yuan loan during PM''s China visit

Pakistan began negotiating 15 billion yuan commercial loan (approximately $ 2 billion) from China after China refused to extend balance of payment support during Prime Minister Imran Khan''s visit to China. This was reported in Business Recorder on 5 December. By 27 December, BR citing a senior finance ministry official reported that the commercial loan would be finalized within the week.
Finance Ministry stated that the government successfully continues its multi-pronged approach to bridging its foreign financing needs and building foreign exchange reserves. Panda Bond approval by the Cabinet is a part of this strategy. This is a well thought-out decision after several rounds of discussions with; (1) Chinese Banks; (2) investment groups; (3) Regulatory Authorities in China and Stock Exchange and; (4) traditional Financial Advisors.
Panda bonds will help government diversify investor base of capital market issuance and provide a source of raising Renminbi. The size, tenor and pricing would be determined on the market response at the time of issuance. The issuances will be done in several rounds. A good response is expected considering the interest shown by Chinese banks and investment groups.