Hungary’s is ready to launch its second yuan-denominated bond in June, Economy Minister Mihaly Varga claimed in comments published on May 29.

Hungary became the first CEE sovereign to issue a Dim Sum bond - a renminbi bond issued outside China - 13 months ago. Budapest sold CNY1bn (€137mn) of a three-year paper with a coupon of 6.25%. The debt was priced to yield around 2.5% after currency exchange, well above the 1.5% that forint bonds were trading at the time. It was Hungary's only action on international debt markets since 2014.

Hungary’s move to enter the Chinese bond market was in line with government policy in recent years to cement ties with Beijing and to open up markets to the east. The move also helped to diversify Hungary’s debt portfolio.

Speculation that Budapest could soon seek to add to the Dim Sum issue has been rising in recent months, and reached a peak as Prime Minister Viktor Orban travelled to Beijing this month to attend China's One Belt, One Road forum.

Hungary approached Chinese investors in late April to sound out appetite for CNY2bn in three-year Panda bonds - yuan-denominated papers issued in China by a non-Chinese issuer - sources claim. However, several foreign issuers are reported to have delayed plans to sell bonds in the onshore renminbi market amid an extended liquidity crunch in China.

Varga appeared to confirm that speculation, and that the size of the new issue could be around the same as in April 2016.“The markets have become hectic and we had to wait until it normalises”, Varga said in an interviewwith Origo.hu. citing reasons for the delay in the bond issue.

Earlier this year, Varga said Hungary will issue €1.2bn worth of foreign-denominated bonds in 2017. The bonds could be issued in euros, dollars, yen or yuan, he said.