To Reduce Dollar Dependence, Government Targets Issuance of Panda Bonds in China

JAKARTA, KOMPAS.com - Finance Minister Purbaya Yudhi Sadewa is preparing the issuance of government debt securities in renminbi or yuan through the Panda Bond instrument.

This step is aimed at strengthening the stability of the rupiah’s exchange rate while diversifying sources of financing.

Purbaya stated that the instrument is designed as an alternative funding option with lower costs compared to dollar-based financing.

“To strengthen the exchange rate, we will also issue Panda Bonds in China with lower interest rates, so we are no longer too dependent on the dollar,” said Purbaya at Merdeka Palace on Wednesday (6/5/2026).

The Panda Bond issuance plan was previously targeted for the second half of 2026. The process is being handled by the Directorate General of Financing and Risk Management of the Ministry of Finance.

Purbaya mentioned that the plan has been conveyed to Chinese authorities and received a positive response.

Indonesia has proposed issuing bonds in yuan in the Chinese financial market. The Chinese government has expressed support for the move.

“Among other things, we said we want to issue Panda Bonds there, and they very much agree, and the rates in China are cheap, only 2.3 per cent, so we can reduce our cost of capital that was busy with interest,” he said.

They have opened opportunities to issue bonds in Indonesia. The government has expressed readiness to accommodate such a scheme.

“Then China also asked if we could issue their bonds in Indonesia, I said yes, it’s reciprocal, if there are Indonesian investors who want to buy Chinese bonds, that’s fine too,” said Purbaya.