Indonesia Delays First Panda Bond Issuance to End of July

Indonesia has pushed back the launch of its first Panda Bonds to the end of July 2026, a delay from the original early July schedule. Finance Minister Purbaya Yudhi Sadewa announced the postponement on Friday, citing requests from Chinese banks and fund managers who require additional time for their internal investment approval processes.

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I think it's good. It means there is strong interest, so I postponed it until the end of July.

"I think it's good. It means there is strong interest, so I postponed it until the end of July," Purbaya stated at a press conference in Jakarta. He explained that some prospective investors recently learned of the offering and asked for more time to submit proposals to their committees. The government agreed to the extension to encourage broader investor participation.

During a recent trip to China, Purbaya met with officials from the People's Bank of China and the Asian Infrastructure Investment Bank (AIIB), which he said generated significant interest from Chinese financial institutions. Some of these institutions are also expected to act as underwriters for the bond issuance, a move Purbaya believes will boost sales.

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Some of them will also act as underwriters. I will allow them to become underwriters so that our bond sales increase there.

The issuance is described as an unconventional but strategic step to diversify Indonesia's development financing. By raising funds in renminbi, the government aims to reduce its dependence on the U.S. dollar, thereby easing pressure on the rupiah. The plan includes using a Local Currency Transaction mechanism between the People's Bank of China and Bank Indonesia to directly convert renminbi proceeds into rupiah.

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That way, our dependence on the U.S. dollar will decrease, reducing pressure on the rupiah.