Home Money Government debt in Russia can be issued in yuan

Government debt in Russia can be issued in yuan

by marusia

The Russian government is working on the issue of federal loan bonds (OFZ) in the currencies of friendly countries. This was stated during the strategic session on “Ensuring financial sovereignty” by Mikhail Mishustin.

He recalled that Russian issuers themselves began to enter the market with loans in Chinese yuan. Mishustin also spoke about the elaboration of ideas to further facilitate the access of foreigners to the Russian capital market.

The government has been thinking about issuing public debt in yuan since 2015, but the decision was postponed due to strict regulatory restrictions from China. Beijing did not agree to change its regulations as part of Moscow’s proposals.

In conditions of budget deficit and problems with loans in the domestic market, interest in placing OFZ in foreign currencies may grow. Thus, the Ministry of Finance held the last auction in February, while it was possible to attract the minimum amount of funds over the past five months.

Earlier, the World Bank estimated that in recent decades China has become the largest creditor of developing countries, overtaking the United States. At the same time, experts believe that Beijing provided loans on specific conditions and with their help only lured developing countries into a debt trap, without trying to help their development. As a result, they were unable to improve the situation in the economy and are now asking for help from the IMF.

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