Debts with Eastern Specifics // What are the pros and cons of Russian bonds in Chinese currency
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On Monday, the Moscow Exchange will start calculating indexes of Russian bonds denominated in Chinese yuan. Since the debut placement of Rusal, which took place in July, five more issuers have placed such securities. As a result, there are already nine issues circulating on the Moscow Exchange with a total volume of CNY 34 billion. High interest in securities is shown by private investors, who, on the wave of de-dollarization, are actively moving into yuan, but do not have enough instruments for temporary placement of funds. With such investments, one should take into account not only interest and credit risks, but also currency risks associated with a possible weakening of the Chinese currency in the event of a further aggravation of the situation around Taiwan and a “hard landing” of the Chinese economy.
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