Russia is about to issue its first sovereign bonds denominated in yuan, marking an important step for Beijing in its push to make the yuan a global currency.
According to Bloomberg, Russia’s Ministry of Finance will begin accepting investor subscriptions on Tuesday (December 2). The bonds will be issued in two tranches: the 3.2-year tranche is expected to be marketed with a target coupon rate of 6.25% to 6.5%, while the 7.5-year tranche’s coupon rate is expected to be as high as 7.5%.
Amid widening budget deficits and limited access to dollar and euro financing channels, Moscow is motivated to issue yuan bonds. At the same time, the surging trade surplus between China and Russia has led Russian exporters to possess substantial yuan reserves.
According to China Customs data, in the first ten months of this year, China’s trade deficit with Russia climbed to $19 billion (78.47 billion ringgit), the highest for the same period since 2022.
According to China Customs data, in the first ten months of this year, China’s trade deficit with Russia climbed to $19 billion (78.47 billion ringgit), the highest for the same period since 2022.
Analysts at China Chengxin International Credit Rating note that this move is an important demonstration of the yuan’s internationalization at the local level, and a key symbol of the evolving global financial landscape. In the long run, Russia’s issuance of sovereign yuan bonds will drive a structural shift toward de-dollarization.
Bloomberg compiled data shows that this year, foreign governments’ total issuance of yuan bonds has reached a record 13 billion yuan (7.5855 billion ringgit), with issuers including Hungary, Indonesia, and Sharjah of the UAE.
The amount of offshore yuan bonds issued so far this year has reached 855 billion yuan, already surpassing the total for the entire year of 2024.
Bloomberg compiled data shows that this year, foreign governments’ total issuance of yuan bonds has reached a record 13 billion yuan (7.5855 billion ringgit), with issuers including Hungary, Indonesia, and Sharjah of the UAE.
The amount of offshore yuan bonds issued so far this year has reached 855 billion yuan, already surpassing the total for the entire year of 2024.
Meanwhile, the overall momentum for foreign entities to conduct yuan financing remains strong. According to SWIFT data, in October, the yuan ranked second only to the dollar in the global trade finance market, with its share of global payment settlements reaching 8.5%.