Moscow sold 12 billion yuan worth of bonds maturing in 2029 at a yield of 6%, in addition to 8 billion yuan maturing in 2033 at a yield of 7%. This operation is considered the largest of its kind for borrowing in renminbi outside the Chinese market this year. Finance Minister Anton Siluanov stated that this issuance represents the establishment of a “new sovereign standard” that will be relied upon in future borrowing, and that it strengthens financial cooperation with Beijing.
The newspaper indicates that Russian banks acquired more than half of the issuance, following a significant increase in their yuan holdings as a result of the expansion of trade with China since the imposition of Western sanctions. This step comes within a broader trend of borrowing in renminbi, as countries such as Hungary and Sharjah have issued similar bonds, while other countries such as Indonesia and Pakistan are considering issuing “Panda Bonds” within China.
The “Financial Times” points out that the yuan has practically become the new “reserve currency” for Russia after the West froze the assets of the Russian Central Bank in 2022. Moscow is heading towards alternative markets in light of financial pressures represented by inflation exceeding 7% and a domestic interest rate exceeding 16%, in addition to declining oil and gas revenues.
Expert Maximilian Hess believes that this issuance gives China additional confidence that Moscow is moving within the project of internationalizing its currency, and he suggests that Beijing gave a clear approval to this step.
The newspaper explains that many countries restructured their dollar-denominated debts by converting them into yuan during 2025, while Russia paid higher returns compared to similar issuances, as the Kazakh Development Bank sufficed with an interest rate of 3.3% on the first “Dim Sum” bonds in Central Asia.
The “Financial Times” also reveals that there is an imbalance in trade between the two countries, after China recorded a rare deficit with Russia following Moscow’s imposition of fees on Chinese car imports, coinciding with huge flows of Russian oil and fuel to China, which has purchased about half of Moscow’s oil exports since 2022.
The Russian “National Wealth Fund” today includes liquid assets worth $50 billion denominated in renminbi. With this issuance, Russian companies have the possibility of borrowing in yuan at lower costs than the high-interest ruble. The newspaper mentions that “Rusal” was the first Russian company to issue “Panda” bonds in 2017, before moving to borrowing in yuan within Russia after 2022.
Hess suggests that this approach will expand so that borrowing in yuan in Russia will soon be close to the size of borrowing in dollars previously if the current path continues.
(Financial Times)
