Targeting Issuance This Year, Purbaya Pushes for Panda Bonds to Raise USD 1 Billion

Indonesia is set to launch a bond issuance specifically targeting Chinese investors. Finance Minister Purbaya Yudhi Sadewa stated the government is aiming to issue Panda Bonds worth USD 1 billion. “Initially, we are targeting perhaps USD 1 billion, but we will see how the market is. If the market can absorb more, we will increase it, depending on market conditions,” Purbaya said in Beijing on Thursday evening (18/6).

The statement was made following Purbaya’s meeting with China’s Finance Minister Lan Fo’an, officials from the People’s Bank of China (PBOC), the Asian Infrastructure Investment Bank (AIIB), and investors during an official visit to China from 16 to 19 June 2026.

The Indonesian government is preparing the issuance of Panda Bonds in China to strengthen rupiah exchange rate stability through the diversification of international financing sources. Panda Bonds are debt securities issued by governments, multilateral institutions, or foreign companies in China’s domestic bond market, denominated in yuan or renminbi, allowing them to be sold directly to investors in mainland China.

However, to issue Panda Bonds, the government, multilateral institutions, or foreign companies must comply with the regulations of China’s financial authorities, namely the PBOC and the National Association of Financial Market Institutional Investors (NAFMII). “During the meeting with the PBOC, we were asked to expedite the submission of the permit, but the underwriter has not yet submitted it. The PBOC requested that the permit be submitted immediately so they can process it quickly. So, their support for this plan is very good,” Purbaya added.

With this support from the PBOC, Purbaya is optimistic that the Panda Bonds can be issued this year. “Next week, the book building should begin once the permit is issued. So, in about two weeks, it might be decided,” Purbaya revealed. The book building refers to the initial offering period where the company and underwriter gather interest and orders from investors within a certain price range.

“Then we can see how much interest there is in the Panda Bonds. We indeed want to diversify our development funding sources so that we are not influenced by just one currency source,” Purbaya added. Furthermore, Purbaya noted that Indonesia and China already have a bilateral local currency transaction agreement that facilitates transactions between the citizens of both countries. “Transactions in yuan can be directly converted to rupiah because of the agreement between the central banks of Indonesia and China. So, I will also try to see if we can directly utilise the bilateral swap agreement, converting straight to rupiah, which will also reduce pressure on the rupiah later,” Purbaya explained.