Russia to borrow in yuan for the first time
Rusya, ilk kez yuan cinsinden borçlanacak
The Russian Ministry of Finance announced that it will issue government bonds in Chinese yuan for the first time after a decade of debate. In the transaction to be carried out on the Moscow Stock Exchange, investors will be offered two bond options with fixed income and different maturities. Russia, whose foreign debt channels are narrowed due to sanctions, aims to bring the yuan stock accumulated in the hands of energy exporters to the economy with this move.
The Russian Ministry of Finance announced that it will issue federal debt bonds in Chinese yuan for the first time on the Moscow Stock Exchange.
According to the statement made by the ministry, a new page is opening in the financial history of Russia with this financial instrument called "panda bonds".
While debt debates in Yuan have been going on for almost a decade, the process has gained momentum after 2022.
Two different options are offered to the investor
The ministry shared the technical details of the bonds to be issued with the public.
Investors will be offered two separate bonds in Chinese yuan and fixed coupon income.
While the maturity of the bonds varies between three and seven years, the coupon payment period is set as 182 days. The nominal value of each bond will be 10 thousand Chinese yuan (about 114 thousand rubles).
The demand collection process is scheduled to take place on December 2. The Ministry of Finance will determine the issuance volume and coupon interest rates according to the demand from the market.
The ministry's statement included the information that the technical settlement is planned to be made on December 8, 2025.
Currency flexibility in payments
Investors will be provided with flexibility in bond purchases and coupon payments. Transactions can be carried out with both Chinese yuan and Russian ruble, and the currency preference will be left entirely to the investor.
Gazprombank, Sberbank and VTB Capital Trading will be the organizer of this first bond issuance to be made in Yuan.
Ten years of discussion
The possibility of issuing bonds in yuan in Russia has been discussed since 2015. Ministry of Finance officials announced that the first export of 1 billion dollars will be made in the fall of 2016 by the end of the year.
However, due to restrictions from legal regulations in China, the transaction did not take place and the process was suspended.
The issue of borrowing over Yuan came to the fore again in 2022 with the actual breakaway of the Russian market from foreign borrowing sources due to sanctions.
The Ministry of Finance last offered classic euro bonds instead of substitute bonds to investors in May 2021.
Prime Minister Mihail Misustin stated in a statement in March 2023 that Russia is working on the issuance of OFZ and other financial instruments in friendly country currencies.
According to the sources of the Reuters news agency, which the Ministry of Finance based on the sources at the end of last month, the Ministry of Finance plans to issue four separate yuan bonds with up to 400 billion rubles with maturity ranging from three to ten years.
The agency stated that with this move, it is aimed to convert the accumulated yuan that energy exporters usually hold in their deposit accounts into investment.
However, the Ministry of Finance had previously announced that it aimed to increase the volume of government borrowing by 2.2 trillion rubles at the end of 2025 due to the increase in the federal budget deficit.