Brazil, which chairs the BRICS 2025 summit is eyeing to launch Chinese yuan-denominated panda bonds in the Asian markets. President Luiz Lula da Silva looks to launch the panda bonds as early as this year to strengthen trade and investments with Asian powers.

The 17th BRICS summit is scheduled to be held in Brazil’s Rio de Janeiro in July and more details about the Chinese yuan-denominated bonds could be revealed next month. The move would make China reap the rewards of the changing dynamics of the financial sector.

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Analysts state that Brazil intends to launch panda bonds to secure greater investments from China and other Asian countries. Brazil is using the situation for its benefit to receive new deals in return after the Chinese yuan bonds go live this year after the BRICS 2025 summit.

“In many cases, I would think of (panda bonds) as a diplomatic move rather than a financial one,” said Graham Stock, a commodity strategist at RBC BlueBay Asset Management. The upcoming BRICS summit could help the Chinese yuan more as the panda bonds could soon be in demand.

Brazil: Chinese Yuan-Denominated Bonds After BRICS 2025 Summit

BRICS is pulling all the strings before the 2025 summit to make the Chinese yuan popular among emerging economies. Strategists say that issuing panda bonds is cheaper compared to the local currencies of other countries. They could most probably launch a 10-year debt bond and be an alternative to the US dollar-denominated assets.

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However, the demand for the bonds might come from only Asian countries and a few like-minded nations in Africa. The BRICS 2025 summit could see many changes and new policies that benefit the Chinese yuan. Other countries could also throw their hat in the ring to make their respective local currencies gain from the changes.