Pakistan has requested China to expand its existing currency swap arrangement by 10 billion yuan (about $1.4 billion) as part of ongoing efforts to boost foreign exchange reserves and enhance financial stability, Finance Minister Muhammad Aurangzeb said.
Speaking to Reuters on the sidelines of the International Monetary Fund (IMF) and World Bank Group Spring Meetings in Washington, Aurangzeb confirmed that Pakistan already maintains a 30 billion yuan swap line with China and hopes to secure the additional funds soon.
“We have asked for an augmentation of 10 billion yuan to strengthen the existing facility,” Aurangzeb said, emphasizing that the expansion would help Pakistan stabilize its external position and support trade settlements in local currencies.
The move reflects Islamabad’s strategy to deepen financial cooperation with Beijing, a key partner in both trade and development under the China–Pakistan Economic Corridor (CPEC). Expanding the yuan swap line would give Pakistan greater flexibility to manage external payments and reduce its reliance on U.S. dollar-denominated transactions, a growing priority for the government amid global currency fluctuations.
Aurangzeb also announced that Pakistan plans to issue its first-ever Panda bond, a renminbi-denominated debt instrument for foreign issuers in China’s onshore market, before the end of the year. He said the bond would diversify Pakistan’s funding sources and attract Chinese institutional investors seeking exposure to Pakistan’s economy.
“This would be an important milestone for Pakistan’s access to Chinese capital markets,” Aurangzeb added. “It complements our broader economic engagement with China under CPEC and aligns with the government’s objective of improving financial resilience.”
The swap line and the Panda bond are both seen as part of a larger policy to strengthen Pakistan’s strategic economic ties with China, which remains the country’s largest trading partner and a critical source of foreign investment. Analysts say that by expanding yuan-based financial instruments, Pakistan can ease pressure on its dollar reserves while fostering long-term monetary cooperation with Beijing.
Pakistan’s request comes at a time when the country continues to rebuild its foreign reserves following last year’s IMF support program and seeks to maintain macroeconomic stability amid a challenging global environment.
If approved, the enhanced swap facility would bring Pakistan’s total available yuan liquidity to 40 billion yuan, further solidifying its financial linkage with China and providing critical support to its external financing framework.
