debut<\/a> last year, when investor demand fell well short of the Finance Ministry’s expectations despite lower yields than comparable ruble debt.<\/p>\nUnder the current budget law, authorities forecast a deficit of 3.8 trillion rubles ($53.2 billion) and plan to finance it entirely through borrowing.<\/p>\n
Russia first issued yuan-denominated sovereign debt in December last year, launching two tranches maturing in 2029 and 2033.<\/p>\n
Sources told Reuters at the time that the Finance Ministry had hoped to raise 300-400 billion rubles ($4.2 billion-$5.6 billion).<\/p>\n
In practice, however, it sold 219 billion rubles ($3.1 billion), equivalent to 20 billion yuan.<\/p>\n
Russian authorities spent more than a decade attempting to issue yuan bonds directly in China but failed to secure terms acceptable to both sides.<\/p>\n
China’s central bank only permits so-called panda bonds, which prevent issuers from transferring the proceeds outside the country.<\/p>\n
For the Russian government, yuan bonds offer a cheaper way to finance budget needs than borrowing in rubles, analysts say.<\/p>\n
“Interest rates on foreign-currency instruments are lower than on ruble instruments, making it cheaper for the state to borrow in foreign currency than in rubles at higher yields,” Natalia Milchakova, a leading analyst at Freedom Finance Global, said.<\/p>\n
The yuan OFZ bonds issued in December carried yields of 6-7%, compared with 13.5-15% on comparable ruble-denominated government debt.<\/p>\n
Russia’s public debt is expected to continue growing in the coming years. Authorities plan to increase state debt by 3.8 trillion rubles ($53.2 billion) this year, by 3.79 trillion rubles ($53.1 billion) in 2027 and by another 4.57 trillion rubles ($64 billion) in 2028.<\/p>\n
Read this article in Russian at The Moscow Times’ Russian service.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Russia’s Finance Ministry is preparing to issue a new tranche of yuan-denominated government bonds to help plug a…\n","protected":false},"author":2,"featured_media":461988,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,114,1096,113,39475,61,60],"class_list":["post-461987","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-china","tag-currency","tag-economy","tag-finance-ministry","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/461987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=461987"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/461987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/461988"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=461987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=461987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=461987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}