Ukraine Bonds Drop With Hryvnia on Bets Talks Won’t End BattleAndras Gergely
Ukrainian Eurobonds fell and the hryvnia touched a record low amid concern a meeting today between President Petro Poroshenko and his Russian counterpart won’t stop fighting near the border between the two countries.
The yield on the dollar-denominated notes due in July 2017 rose 16 basis points to 10.56 percent by 6:04 p.m. in Kiev, the highest since Aug. 12 on a closing basis and taking the five-day increase to 83 basis points. The hryvnia depreciated as much as 4.2 percent before trading 0.4 percent weaker at 13.6 per dollar, bringing its decline this year to 39 percent, the most among 170 currencies tracked by Bloomberg.
Poroshenko and Russian President Vladimir Putin began a meeting with the European Union’s foreign-policy chief, Catherine Ashton and the presidents of Belarus and Kazakhstan at a summit in Minsk of the Customs Union, a Russian-led trade bloc. Poroshenko, who called for Ukraine’s territorial integrity to be respected, said he was “optimistic” about the summit and was ready to discuss options for peace.
“Our base-case is that some signals of co-operation will come out of the meeting,” Tatha Ghose, a London-based analyst at Commerzbank AG, said in an e-mailed report today. “But these may not be compelling, nor should we assume that they will translate into action by rebels in eastern Ukraine.”
Russia’s ruble was little changed versus the dollar after weakening as much as 0.2 percent and the Micex Index of equities fell 0.8 percent. The Ukrainian Equities Index lost 1.1 percent in its third day of declines.
The conflict between Ukraine’s government and pro-Russian separatists has left more than 2,000 dead since Putin annexed Crimea in March. Ukraine said today 200 rebels and 12 Ukrainian servicemen died in the past 24 hours.