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Ukraine to auction war bonds to fund armed forces

Ukraine to auction war bonds to fund armed forces
Ukraine to issue war bonds to fund armed forces. Photo: Anatolii Stepanov/AFP via Getty

Ukraine will raise money fund its armed forces in their battle against Russia’s invasion by issuing war bonds.

The Ukrainian government hopes to borrow as much as $1.36bn (£1bn) from international bond investors.

Auctions of war bonds in the local hryvinia currency will start on Tuesday, with Ukraine looking to borrow money from investors for one year.

The rate of return will be determined at the auction.

Read more: Rouble plunges against US dollar as Russia doubles interest rates

“In the time of military aggression of the Russian Federation, the ministry of finance offers citizens, businesses and foreign investors to support the budget of Ukraine by investing in military government bonds,” Ukraine’s finance ministry said.

In the US, war bonds were used during World War I, when the country began selling what it called Liberty Bonds.

The bonds targeted Americans’ sense of patriotic duty, with slogans such as, “If You Can’t Enlist, Invest. Buy A Liberty Bond” and “Defend Your Country With Your Dollars.”

Ukraine is already receiving military support as Germany pledged 1,000 anti-tank weapons and 500 Stinger anti-aircraft defense systems to Ukraine, in a historic u-turn on its policy of never sending weapons to conflict zones.

The European Union said it will spend €450m (£376m, $502m) on weapons and equipment for Ukraine.

Ukraine’s fundraising comes as a slew of western sanctions cripples Russia’s economy.

Russia has more than doubled its interest rate to 20% in a bid to halt a slump in the value of its currency.

Read more: Bitcoin: Binance and Kraken refuse to ban Russian users

The Bank of Russia raised the rate from 9.5% after the rouble sank 30% after new western sanctions. The currency then eased back to stand 20% down.

The UK government is also fast-tracking plans to tackle the flow of “dirty money” and expose Russian oligarchs who launder their wealth through the UK’s property market after the Ukraine crisis.

France is identifying all the French assets of Russian oligarchs subject to EU sanctions, including property and luxury yachts and cars, with a view to seizing them.

Watch: Wrecked vehicles seen in Kharkiv amid fighting