Feb 02 2018

Turkey considers Chinese bonds to spread risk – minister

Turkey is evaluating whether to sell Chinese Panda bonds to spread its borrowing risks, Deputy Prime Minister Mehmet Şimşek said.

The plan is being considered after Ankara announced it may issue debt in Russian roubles, Şimşek told the Dunya newspaper in an interview published on Friday.

Turkey is seeking to spread its borrowing risks after the lira tumbled against the dollar last year, making repaying government debt more expensive in lira terms. The Treasury plans $6.5 billion worth of bond issues this year.

Panda bond issues have been as large as $500 million, Şimşek said. Turkey is seriously considering the option, he said.

Borrowing in foreign currency over the past five years has proven more expensive than borrowing in lira, Şimşek said, referring to the lira’s losses against the dollar and other major currencies, which meant some Turkish companies struggled with repayments.