Portugal considers financing itself in Chinese renminbi

8 May 2017

Portugal is analysing the possibility of public debt denominated in Chinese currency, the renminbi, in order to broaden “the investor base and attract financing,” Finance Minister Mario Centeno said in Beijing at the end of a three-day visit to China.

The Portuguese minister held meetings during his stay in the Chinese capital with officials from the People’s Bank of China, the central bank, the Industrial and Commercial Bank of China, the Bank of China, the Agricultural Bank of China and the China Postal Savings Bank.

Centeno told Portuguese news agency Lusa that Portugal could become the first European country to issue public debt in renminbi, a possibility that is however dependent on credit ratings attributed by the major credit rating agencies.

Moody’s, Standard & Poor’s and Fitch Ratings have rated Portugal’s long-term sovereign debt as “junk”, which means that the bonds issued are highly speculative and not investment quality.

Moody’s said on Friday it had kept Portugal’s sovereign debt rating at “Ba1” with a stable outlook, with the next assessment scheduled for 1 September.

On his trip to China Centeno was accompanied by the president of the Treasury and Public Debt Management Agency, Cristina Casalinho and the Secretary of State for the Treasury, Alvaro Costa Novo.

China has recently become a major foreign investor in Portugal having acquired important stakes in companies in the energy, insurance, health and banking sectors. (macauhub)