Ukrainian hryvnia banknotes are seen in a photo illustration shot in Kyiv, Ukraine, on Aug. 6, 2014. (Konstantin Chernichkin/Reuters)
KYIV—Ukraine’s hryvnia currency weakened by more than 1 percent from the beginning of the trading session on Tuesday after Russia formally recognized the independence of two regions of eastern Ukraine, Refinitiv data showed.
The rate slipped below 29 to the dollar, sinking back to last month’s level. In February, the hryvnia had strengthened slightly and approached 28/$1 on hopes that intense diplomatic talks could lead to a peaceful resolution of the eight-year-old conflict in eastern Ukraine.
The currency has weakened about 6.5 percent since the start of the year because of foreign capital outflows amid growing concerns over Russian troop movements near Ukraine’s borders and fears Russia is preparing for a military attack against Ukraine. The Kremlin has denied that.