According to a Reuters report on May 14, 2025, Brazil is considering issuing its first renminbi-denominated sovereign bond, also known as "Panda Bond." The report pointed out that the Brazilian Ministry of Finance has not yet made a final decision on this matter, but it is seen as another move by Latin America's largest economy to strengthen its ties with China, its largest trading partner.
In the face of Trump's trade war and comprehensive tariff imposition, Brazil accelerated the implementation of the above strategy. Brazilian President Luiz Inacio Lula da Silva concluded his successful visit to Beijing on Wednesday. China announced a series of investment plans, and the Central Bank of Brazil signed a currency swap agreement with the People's Bank of China.
A source who wished to remain anonymous said that given the expansion of China's financial market, issuing renminbi-denominated sovereign bonds makes sense, and noted that the Ministry of Finance regularly assesses opportunities to issue bonds in currencies other than the US dollar. This source stated: "Since no final decision has been made, it is difficult to say when it will be issued, whether this year, in the near future, or later."
In its annual financing plan this year, the Brazilian Ministry of Finance emphasized its continued focus on issuing US dollar-denominated bonds to maintain an effective sovereign yield curve and provide benchmarks for Brazilian corporate issuance. In February this year, Brazil issued a new round of 10-year US dollar bonds, raising $2.5 billion.
About 96% of Brazil's public debt is denominated in Brazilian real, with the remainder mainly in US dollars. Brazil's last issuance of sovereign bonds in other currencies was in 2014, when it issued euro-denominated bonds. (International Finance News)
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