Russia to issue 10-year yuan-denominated government bonds
Vladimir Putin and Xi Jinping, Beijing, May 20, 2026 (Photo: Sputnik/Alexander Kazakov/Pool via REUTERS)
The Russian government is planning on issuing federal loan bonds denominated in Chinese yuan, Interfax Russia wrote on May 21.
Driven by a ballooning budget deficit and the crushing weight of Western sanctions, the Russian government has resorted to issuing bonds in Chinese yuan to sustain its increasingly isolated economy. With domestic interest rates soaring past 20% and making ruble-denominated debt prohibitively expensive, Moscow is using the cheaper yuan bonds to secure vital funding.
The move also serves a dual purpose: absorbing a massive surplus of Chinese currency accumulated by Russian energy companies and accelerating a forced "de-dollarization" as the Kremlin relies entirely on Beijing for its financial survival.
Russian Finance Ministry will collect orders on the new Russian government bonds denominated in yuan in the last week of May, the news outlet reported.
Investors will be offered fixed-coupon bonds with 10 years maturity and a face value of 10,000 Chinese yuan ($1,470) per note.
The size of the issuance and the coupon rate for the issue will be determined based on the results of the book-building process, scheduled for May 28. The technical placement of the new debt securities will take place on June 3.
Bonds will be available for purchase in Chinese yuan or Russian rubles at investors’ discretion.
The book-building for yuan-denominated bonds was announced on May 21, the day after Vladimir Putin returned from his visit to Beijing, the Moscow Times reported.
The bonds will be issued to cover Russia’s budget deficit, which reached 6 trillion rubles ($84 billion) between January and April.
The Russian budget bill for 2026 projects a 3.8 trillion ruble ($53 billion) deficit, which is expected to be fully financed through loans, resulting in an equivalent increase in public debt. For 2027, public debt is planned to rise by the same amount of 3.79 trillion rubles ($53 billion), followed by a further increase of 4.57 trillion rubles ($64 billion) in 2028.
Yuan-denominated bonds provide a convenient way for the Russian government to finance the budget deficit, as their interest rates are lower than those on ruble-denominated securities.
Russian authorities have been attempting to issue yuan-denominated bonds in China for over a decade but have been unable to reach an agreement on terms with Beijing. The Chinese central bank only allows the issuance of so-called panda bonds, the proceeds of which cannot be transferred abroad.
In December 2025, the Russian Finance Ministry launched its first-ever yuan-denominated bonds. The offering included a 3-year, 3-month bond worth 12 billion yuan ($1.7 billion) maturing in February 2029, and a 7.5-year bond worth 8 billion yuan ($1.17 billion) maturing in June 2033, with annual coupon rates of 6% and 7%, respectively.
The placement was carried out alongside the redemption of sovereign euro-denominated bonds and their replacement securities, allowing investors to shift their holdings into yuan-denominated bonds.
Head of the Russian Finance Ministry’s public debt department Denis Mamonov earlier noted that the ministry is prepared to issue yuan-denominated bonds annually in volumes roughly comparable to the maturing sovereign bonds in dollars and euros, provided there is sufficient market demand. He added that the ministry aims to expand the yuan-denominated federal loan bond curve in 2026 with two additional maturities: 5 and 10 years.
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