In a breakthrough shift in the financial sector, the BRICS alliance has paved the way for other countries and leading business institutions to look beyond US dollar-based Treasuries and bonds and buy other Asian-based financial assets. Kazakhstan, which participates in BRICS Outreach formats, has allowed its state-run oil and gas company KazMunayGas to eye Chinese yuan bonds, leaving aside the US dollar-based bonds and Treasuries for the first time.
The Chinese yuan bonds are cheaper debt compared to the US-denominated financial assets such as Treasuries and bonds. KazMunayGas is also exploring opportunities to issue debt in Arab countries and buy their bonds in a first-of-a-kind development. The credit for this new shift goes to the BRICS bloc as they’re convincing firms that there are more options to explore such as the Chinese yuan than just buying US dollar-based assets.
Also Read: BRICS vs G7: Who Is Richer in 2025?
BRICS: Kazakhstan’s Oil & Gas Firm Eyes Chinese Yuan Bonds, Sidelining US Dollar Assets
KazMunayGas is looking to explore cheaper borrowing terms and usher the oil and gas industry into a new era. Reducing US dollar-denominated assets was the primary goal of BRICS and now other countries are following suit. “We looked at all options. Currently, there is a possibility to sell dim sum, and panda bonds,” said CEO Askhat Khassenov to Bloomberg. “Dim sum and panda bonds offer rather good conditions,” said Khassenov.
Also Read: America Urges India To Reject BRICS: ‘Do Business With the US’
For the uninitiated, dim sum bonds refer to notes denominated in the offshore Chinese yuan. It mainly trades outside mainland China. In addition, panda bonds are yuan debt sold by foreign borrowers in China’s domestic market. It might not take much time before state-run oil firms from BRICS countries start eyeing Chinese yuan bonds.
The BRICS development will add a dent in the US dollar-denominated assets while Chinese yuan bonds go for the win. This is the first such instance where the yuan assets are being considered and might not be the last either.