Kiev city council ordered to consider moratorium on debt repayment

By Caroline Salls

Pittsburgh, Oct. 2 – The City Council of Kiev will look into the possibility of imposing a moratorium on the repayment of Kiev’s foreign debt, according to a news release.

Kiev mayor Vitali Klychko said the Permanent Commission for the City Budget, Social and Economic Development ordered him to consider the repayment option.

“Now we have to re-pay the loans taken by Kyiv 10 years ago,” the mayor said in the release.

“In 2005 our predecessors took loans amounting $250 million by the official exchange rate of the National Bank of Ukraine with an interest rate of 8.8% per year and maturity of the principal part of the loan in 2015. According to the actual exchange rate, these loans amounted to UAH 5.5 billion.

“We have re-paid our energy debts and debts to municipal employees. We have also adopted a well-balanced, socially-oriented budget for 2015.”

Klychko said Kiev is now getting ready for the winter season and is spending its funds mostly on heating and energy supplies, repairing and insulating houses and buildings and installing energy consumption meters.

“We are also spending to maintain our infrastructure – repairing motorways, building schools and kindergartens,” Klychko said.

“Kiev must have sufficient funds to maintain itself and to supply its residents. This is our priority for now.”

Under the current legislation, the City Council of Kiev can temporarily stop payments on its foreign debt.

The budget commission of the city council received an order on Thursday to check the possibility of the moratorium on debt repayment, according to the release.

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