Indonesia markets first panda bonds as it broadens funding
Janice Huang & Harry Suhartono / Bloomberg Published on Tue, Jul 21, 2026 / 04:01 PM GMT+08 / Updated 2 days ago
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(July 21): Indonesia has begun marketing its inaugural yuan-denominated bonds in China’s domestic debt market, as Southeast Asia’s largest economy seeks to diversify funding sources amid currency volatility and fiscal challenges.
The country is offering three-year and five-year panda bonds, targeting a combined initial issuance size of as much as seven billion yuan, according to bond offering documents. It has secured approval to issue up to 30 billion yuan of panda bonds in China’s interbank bond market over the next two years, the documents show.
“Investor response to our China bonds has been positive,” Indonesian Finance Minister Purbaya Yudhi Sadewa told a briefing on Tuesday.
Indonesia has already tapped international debt markets in multiple currencies this year, including the euro, Japanese yen and offshore yuan, raising a total of around US$7 billion, a record amount for its non-dollar issuance. The planned panda bond sale underscores Jakarta’s efforts to broaden its funding sources as it seeks to balance its growth ambitions with macroeconomic stability.
Indonesia is raising the funds at a time of intense economic pressure, with the rupiah falling to a series of record lows this year while its stock market remains the world’s worst-performing. Concerns over Indonesia President Prabowo Subianto’s increasingly state-focused policies have soured investor sentiment alongside a widening current account deficit and high energy prices.
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Bank Indonesia has raised interest rates to help steady the currency, but risks from higher import costs, fuel subsidies and the government’s ambitious growth agenda continue.
Earlier this year, Moody’s Ratings and Fitch Ratings Inc cut their outlook on Indonesia’s sovereign credit rating to negative, citing concerns over governance under Prabowo’s administration, while maintaining their ratings. Chinese rating firm China Lianhe Credit Rating Co has assigned a AAA credit rating to Indonesia.
Proceeds from the panda bonds will be fully remitted offshore for general funding purposes and may be converted into other currencies, according to the documents. Bookbuilding is scheduled for Thursday.