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. Last Updated: 07/27/2016

Finance Ministry Plans to Sell 5 Bln Rubles of GKOs

The Finance Ministry, hoping to restore its once-booming domestic debt market, said Wednesday it will issue 5 billion rubles ($174 million) of GKO treasury bills next Wednesday.

Bella Zlatkis, who heads the domestic securities department of the Finance Ministry, said there will be auctions for 2.5 billion rubles of three-month paper, which will mature May 31, and 2.5 billion rubles of a six-month issue, which will mature Sept. 6.

The three-month treasury bills, to be made available to all investors, were expected to produce a yield of 22 percent to 25 percent, Zlatkis said.

"If we look at the market, paper maturing at the beginning of June has about the same price. We will simply not attract investment at other prices," she added.

The six-month paper is aimed at foreigners with funds in so-called "S" accounts earmarked for domestic debt investments.

Proceeds from this new paper could then be used to buy foreign currency for repatriation of funds that have been frozen since the nation defaulted on its domestic debt in August 1998.

"This [six-month] paper is quite long, so there might be no premium on it, more likely a discount, but it is clear that there will be a very insignificant yield," Zlatkis said.

Last December, the ministry placed 3.77 billion rubles of new bonds and later made additional placements of other issues.