Russia's plan to borrow
in yuan stumbled over Panda bonds: deputy finance
minister
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[June 06, 2017]
By Darya Korsunskaya and Andrey Ostroukh
ST
PETERSBURG, Russia (Reuters) - Russia put off its plans to borrow in
yuan the last minute as it did not meet a condition laid down by Beijing
- to borrow by issuing Panda bonds on China's domestic market, Russia's
deputy finance minister said.
Russia trumpeted its intention and ability to sell a debut treasury bond
denominated in the Chinese currency throughout 2016. But the finance
ministry has not tapped the Chinese debt market yet because it has not
reached a final agreement with Beijing.
"We have no plans yet to sell Russian bonds in the form of Panda bonds,
that is where all the problems come from," Deputy Finance Minister
Sergei Storchak told Reuters in an interview.
Russia wanted to borrow yuan by the end of 2016, what was seen as a step
toward Moscow's ambition of using Asian debt markets to compensate for
its limited access to Western funding.
The two sides held numerous talks on the bonds, with the finance
ministry's advocating for offering its so-called OFZ bonds for Chinese
investors in Moscow. The Moscow Exchange told Reuters it merely needs to
"press the button" once the Russian and Chinese governments agree on the
delayed sale.
![](http://archives.lincolndailynews.com/2017/Jun/06/images/ads/current/graue_17_cruze_040317.png)
Seeking to limit capital outflows, Chinese authorities were not ready to
let its local investors play on the Russian bond market, Storchak said.
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![](../images/060617pics/busine33.jpg)
Russian Deputy Finance Minister Sergei Storchak speaks during a
session of the St. Petersburg International Economic Forum (SPIEF),
Russia, June 1, 2017. REUTERS/Sergei Karpukhin
![](http://archives.lincolndailynews.com/2017/Jun/06/images/ads/current/bennett_lda_123015.png)
Speaking on the sidelines of an annual international economic forum in St.
Petersburg, Storchak said China had instead offered Russia to raise funds via
Panda bonds.
Panda bonds are circulated on the China's onshore market by foreign governments
and firms.
"We have decided that Panda bonds are a generally available instrument, which is
not really interesting and efficient from the point of view of our market
development," Storchak said.
"Especially given that we could easily compensate the absence of yuan borrowing
with borrowing in rubles," he said.
The finance ministry is now taking its time to study requirements of its Chinese
partners, Storchak said.
Eventually Russia could change its mind and issue bonds in onshore China as the
market seen growing further, Storchak said.
(This story was refiled to fix typo in third para from bottom)
(Writing by Andrey Ostroukh; Editing by Tom Heneghan)
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