The Russian Ministry of Finance announced that it had issued government bonds denominated in Chinese currency worth 20 billion yuan ($2.8 billion), which included bonds worth 12 billion yuan maturing in 2029 and yielding 6%. and those worth 8 billion yuan with a maturity in 2033 and a yield of 7%. As the ministry added, more than half of the bonds were purchased by banks.
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How much did Russia obtain from the sale of bonds?
What does Russia intend to spend the funds on?
What bonds has Russia issued?
Which other countries are considering issuing bonds in RMB?
— We managed to create a liquid state benchmark that will serve as a pricing guide for corporate borrowers and contribute to deepening bilateral cooperation between Russia and China in the financial sector, said Russian Finance Minister Anton Siluanov.
As “FT” points out, the value of Russian bonds far exceeds what was obtained by other countries that switched to issuing debt in yuan this year – Hungary issued bonds worth 5 billion yuan in China in September, and Sharjah, which is part of the United Arab Emirates, sold bonds worth 2 billion yuan in October.
The Chinese yuan is the reserve currency for Russia
The newspaper reminds that Beijing seeks to promote greater international use of its currency and challenge the dominance of the US dollar. Also considering selling bonds denominated in yuan on the Chinese market next year are, among others: Indonesia and Pakistan.
“FT” writes that the Chinese yuan has de facto become a new reserve currency for Russia, especially after its access to loans in dollars and euros was cut off in 2022 as a result of the invasion of Ukraine, and the foreign assets of the Russian central bank were frozen.
The daily reminds that the Russian economy is struggling with high domestic interest rates exceeding 16%. and inflation of 7%, partly due to the high cost of producing goods that would otherwise be imported. Sanctions imposed after the aggression against Ukraine increasingly restrict the export of oil and gas, which are an important source of financing for the Kremlin.
