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. Last Updated: 07/27/2016

Moscow's City Hall Prepares New Domestic Bond Scheme

The city of Moscow is working on a new scheme to place its domestic bonds, which would protect investors against ruble depreciation and inflation, a city official said Monday.

"We do not think we shall be able to place the bonds under the old scheme," said Sergei Pakhomov, first deputy chairman of the municipal borrowing and stock market development committee.

"It is too early to talk about details but we are thinking seriously over the problem and will try to implement it [a new plan] soon," he added.

Moscow recently suspended auctions in its six and nine-month domestic bonds. It is due to repay 103.35 million rubles ($6.44 million) of bonds on Oct. 23 and 43.24 million rubles Nov. 12.

The government last month announced a de facto devaluation of the ruble, which immediately triggered soaring inflation.

Pakhomov said Moscow would repay the old bonds on time but might offer investors alternative repayment schemes.

The city is repaying one of its previous savings bonds under a voluntary scheme allowing the conversion of some of the paper into housing certificates, a market for which has yet to appear, or accepting the bonds as city taxes.

Pakhomov said the city could use one of these schemes for future domestic bond auctions.