Russia's Finance Ministry is preparing to issue a new tranche of yuan-denominated government bonds to help plug a widening budget deficit that reached nearly 6 trillion rubles ($84 billion) in the first four months of the year, underscoring Moscow's growing reliance on debt financing and Chinese currency instruments as Western sanctions continue to constrain its options.
The ministry announced Thursday that it would begin collecting investor orders for the new yuan-denominated OFZ sovereign bonds, one day after President Vladimir Putin returned from a visit to Beijing.
Orders will be accepted through May 28, while the bonds are scheduled for placement on June 3. The securities will have a 10-year maturity. Investors will be able to receive returns either in Chinese yuan or Russian rubles.
The offering suggests Moscow is doubling down on yuan financing as sanctions constrain access to Western capital markets.
But the strategy delivered mixed results in its debut last year, when investor demand fell well short of the Finance Ministry's expectations despite lower yields than comparable ruble debt.
