The value of Ukrainian government bonds fell this week amid fading hopes that a U.S.-brokered cease-fire deal between Russia and Ukraine will materialize anytime soon.
Ukraine’s dollar bond maturing in 2036 fell by 3 cents to 54 cents on the dollar after climbing to almost 70 cents when U.S.–Russia talks kicked off in February.
“The market is starting to take the view that the war is here for longer,” Kaan Nazli, an emerging market portfolio manager with Neuberger Berman, which holds Ukrainian debt, told Reuters on March 31.
In recent months, Ukrainian bonds had rallied on hopes that U.S. President Donald Trump would make good on his electoral pledge to swiftly end the three-year conflict between Russia and Ukraine.
In mid-February, top U.S. and Russian officials held a first round of landmark talks in Saudi Arabia, where they discussed possible means of ending the conflict.
Last month, after a fresh round of talks in the Saudi capital, the United States brokered a Russia–Ukraine cease-fire aimed at ending hostilities in the Black Sea.
Within the context of talks, Russia and Ukraine also pledged to refrain from conducting attacks on each other’s energy infrastructure.
But since the deal was agreed to on March 24, the two warring sides have accused one another of repeatedly breaching the terms of the truce.
On March 30, Ukrainian President Volodymyr Zelenskyy claimed that Russia had launched more than 1,000 drones at Ukrainian targets over the previous week.
Moscow, for its part, has accused Kyiv of conducting multiple drone and missile attacks on Russian energy facilities over the same period.
Hopes for a limited truce dimmed even further this week after Trump appeared to blame Russia for the continued hostilities.
“If Russia and I are unable to make a deal on stopping the bloodshed in Ukraine, and if I think it was Russia’s fault ... I am going to put secondary tariffs on all oil coming out of Russia,” Trump said in remarks to NBC News on March 30.
“That would be, that if you buy oil from Russia, you can’t do business in the United States.”
Speaking to reporters soon afterward, Trump again voiced frustration with his Russian counterpart, but said, “I think we are making progress, step by step.”
‘Very Difficult’
Trump accused Zelenskyy of seeking to “back out” of a prospective minerals deal with the United States, warning the Ukrainian leader that he would face “big problems” if he did so.“He’s trying to back out of the rare earth deal,” Trump told reporters aboard Air Force One on March 30. “And if he does that, he’s got some problems—big, big problems.”
If signed, the deal would require Ukraine to hand over all profits made from its mineral resources to repay its wartime debts—plus interest—to the United States.
On April 1, Ukrainian Foreign Minister Andrii Sybiha said Kyiv would work with the United States to find mutually acceptable terms for the proposed minerals deal.
“This process will continue and we will work with our American colleagues to reach a mutually acceptable text for signing,” Sybiha told reporters.
Moscow, meanwhile, said it is maintaining contact with Washington with the ultimate aim of ending the conflict but that the issues involved are extremely complex.
“We are continuing our contacts with the American side,” Kremlin spokesman Dmitry Peskov told reporters on April 1.
“The topic is very difficult. The matters we are discussing are related to the Ukrainian resolution—they require a lot of additional effort.”
