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BRICS nation Russia is taking another step to ditch reliance on the US dollar, issuing its first government bonds denominated in Chinese currency.
Russia just raised $2.8 billion of bonds denominated in Chinese renminbi, capitalizing on China’s low interest rates to fund its invasion of Ukraine.
Russia’s finance minister Anton Siluanov says the move further cements the direct financial link between the two nations.
“We have succeeded in creating a liquid sovereign benchmark that will serve as a pricing guide for corporate borrowers and will contribute to the deepening of bilateral co-operation between Russia and China in the financial sector.
The results of the placement opened up significant opportunities for the further development of the national financial market and demonstrated interest in debt instruments denominated in the currency of the Russian Federation’s strategic partner.”
According to Siluanov, the transaction was executed entirely using Russian accounting and settlement infrastructure.
“Both issues were and remain available to all categories of investors, including foreign ones.
Given the benchmark reliability of the state as an issuer, such an instrument can be used for a variety of purposes, from managing available yuan liquidity to foreign currency savings.”
Much of Russia’s $50 billion National Wealth Fund is now denominated in renminbi, which opens cheaper financing for Russian firms.
