Reference News Network, December 5 report. According to "Rossiyskaya Gazeta" on December 4, the Russian Ministry of Finance has issued two series of federal bonds denominated in Chinese yuan for the first time. This is undoubtedly a matter worth noting. This new financial instrument in the Russian market does have practical value for individual investors and can serve as another option for investors to hedge against the impact of exchange rate fluctuations on their savings.
According to the report, the specific details of the two series of bonds issued by the Ministry of Finance are as follows: The bond maturing in February 2029 has an annual coupon rate of 6% and a fundraising scale of 12 billion yuan; the bond maturing in June 2033 has an annual coupon rate of 7% and a fundraising scale of 8 billion yuan. The face value of each bond is 10,000 yuan. Interest payments and principal repayment for both series of bonds will be made in yuan, and investors may also choose to settle in rubles at their own discretion.
Finance Minister Anton Siluanov said: "The market demand for the first issuance of yuan-denominated sovereign bonds was strong, and a diversified buyer structure was formed during the issuance process. Institutional investors showed higher interest in these long-term bonds, with their share exceeding 40% of the total bond issuance size. We have successfully established a benchmark for the issuance of highly liquid sovereign bonds, which will provide pricing references for issuing institutions and help deepen bilateral cooperation between Russia and China in the financial field."
The report stated that Mikhail Vasilyev, chief analyst at the Foreign Trade Bank of Russia, pointed out that the main purpose of this issuance is to gradually replace maturing US dollar and euro sovereign bonds with yuan bonds, and to provide a pricing benchmark for enterprises issuing yuan bonds (especially long-term bonds). He added that Russian enterprises had already issued yuan bonds in the domestic market before, so this issuance is not opening up a completely new foreign currency financial market.
This expert said: "This issuance targets domestic investors rather than foreign investors, so it will not bring new capital inflows into the Russian economy and financial system. There is a certain demand in the Russian market for sovereign-like foreign currency instruments, and the bonds denominated in dollars and euros issued by the Ministry of Finance are gradually maturing. This issuance aims to replace the existing products with new foreign currency-like instruments."
In his view, the reasons for the strong demand for this issuance include some individual investors prefer to use foreign currency instruments to allocate their savings, so they chose the creditworthy Chinese yuan sovereign bonds; institutional investors can manage idle RMB liquidity by purchasing Chinese yuan federal bonds or use them to hedge against risks caused by the depreciation of the ruble in their investment portfolios." (Translated by Zhao Zhipeng)
Original: toutiao.com/article/7580182782010343972/
Statement: This article represents the views of the author himself.