Two people were killed in another round of intense shelling between Western-backed Ukrainian government forces and pro-Russian fighters in the separatist east, officials from both sides said on Friday. Kiev has billed this week as a deadline for an agreement. They have not reached an agreement, said a source close to the talks, but will resume negotiations later on Thursday.
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The negotiations are taking place against a backdrop of escalating tension in Ukraine as the military said pro-Russian rebels shelled the army more actively than at any time in the past six months and may be planning a fresh offensive amid wrangling over a fraying peace accord.
Ukraine is due to repay a $60 million coupon on August 23 and a $500-million bond maturing on September 23.
Others, including Vadim Khramov, an economist at Bank of America Merrill Lynch, were optimistic, particularly since the two sides released a joint statement, indicating they may be on the same page.
Yerlan Syzdykov, head of emerging markets bond and high-yield at Pioneer Investments, said creditors’ willingness in a late July proposal to accept a nominal haircut had been an important step. What Kyiv must do, Mr. Guz says, is simultaneously build up its military capacity and reform its economy.
The group has refused to accept any major reduction to its bonds’ face value and wants a proposed maturity extension to expire as soon as Ukraine’s imploding economy returns to growth.
Dubbed the “wall”, the ambitious project to seal up Ukraine’s porous 2,000-kilometer frontier with its ex-Soviet neighbor was announced in March 2014 after Moscow seized the Crimea peninsula from Kiev.
While the continuation of talks was seen as cautiously positive, investors were concerned about a recent flare-up of fighting in eastern Ukraine.
Leviyev earlier this year said he tracked down Russian soldiers who were killed in eastern Ukraine through social media and published pictures of some of the graves. However, sanctions imposed on Russian Federation by the US and the EU in reaction to the Ukraine crisis have meant that activity has now been halted, much to the annoyance of the Kremlin.
The continued violence in rebel territories has hampered the country’s efforts to regain a sound financial footing.
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The hryvnia, which gained 12 percent against the dollar in the second quarter, remains 28 percent weaker this year, the second-worst performance globally after Belarus’s ruble, data compiled by Bloomberg show.
