KIEV, , (Pakistan Point News - APP - 10th Nov, 2016 ) - Ukraine's eurobonds dropped sharply in value Thursday on fears that US president-elect Donald Trump may drop Washington's support for the war-torn nation in favour of closer relations with Russia. Trump's shock election victory Tuesday has been met with trepidation in Kiev because of the outspoken reality tv star and land tycoon's praise of Russian President Vladimir Putin and show of a degree of ignorance about the situation in Ukraine.
Eurobonds are long-term debt denominated in a Currency other than that of the issuer country, in Ukraine's case typically Dollars and Euros. They are often seen as a safer alternatives to the stock market, commodities or debt issued in Ukraine's own currency, the Hryvnia. Their prices fall and yields paid by the issuer rise on uncertainty over whether that money will be paid back in time. The former Soviet republic accuses Russia of starting a pro-Moscow separatist revolt in its east shortly after annexing its Crimea peninsula in March 2014.
The 30-month insurgency has claimed nearly 10,000 lives and been blamed by the United States and the European Union on direct Russian support -- a charge Moscow denies. But Trump has floated the idea of working more closely with Putin in conflicts such as Syria and pulling Moscow's relations with the West out of their post-Cold War low. Ukraine's benchmark 10-year eurobond fell by 1.2 percent of its value in afternoon trading Thursday. The yield rose to an annual 9.
1 percent -- a figure that makes borrowing for most governments too expensive and not a viable choice. The United States was the main proponent of a $17.5-billion (16.1-billion-euro) Ukrainian programme approved by the International Monetary Fund last year. The rescue has helped triple the size of Ukraine's state coffers and helped stabilise and currency as well as the inflation rate. Some Western analysts noted that there was a risk that a Trump presidency would either reject or limit further financial support for Ukraine in order to better relations with Russia.