Pakistan Requests to Increase Currency Swap Line with China, Plans Panda Bond

Pakistan has asked China to increase its currency swap line by 10 billion yuan ($1.4 billion) to help stabilise its economy, Finance Minister Muhammad Aurangzeb announced. Currently, Pakistan has a 30 billion yuan swap deal with China, and the new request would bring it to 40 billion yuan.

In addition, Pakistan is working on issuing its first Panda bond, a debt instrument sold in China’s domestic market in yuan. Talks with the Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB) have been positive, and Pakistan hopes to issue the bond later this year.

Aurangzeb also expects the IMF to approve a new $1.3 billion climate loan in May, which will trigger a $1 billion payout. Despite tensions with India, Aurangzeb said the impact on trade is minimal, with trade between the two countries already down to $1.2 billion last year.

Pakistan’s economic growth is expected to be around 3% for the current year, with plans to reach 6% in the future.