Can Renminbi-bonds scale as a viable option for developing countries?

Yoan Raih and Guiliu Luo

No 2606, FDL Policy Notes from CEPREMAP

Abstract: As China seeks to internationalize the renminbi and EMDEs search for alternative sources of financing, Panda bonds have emerged as a growing funding option. This paper argues that while RMB borrowing can offer advantages over hard-currency debt, headline yields often understate the true cost once credit enhancement and currency risks are considered. Panda bonds have significant potential, but scaling the market will require further regulatory reforms, risk-sharing mechanisms, and stronger participation from multilateral and Chinese policy institutions.

Keywords: Panda bonds; Renminbi (RMB) internationalization; Sovereign debt; Emerging and developing economies (EMDEs); External financing; Currency risk; Chinese bond market; Guarantees (search for similar items in EconPapers)
Pages: 31 pages
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:cpm:notfdl:2606

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