After the central bank dramatically raised interest rates by 6.5 percentage points to 17 percent overnight, Russia has given up any pretence that it is not in the grip of a currency crisis.
After Germany’s foreign minister saw “no reason for optimism” after talks in Moscow on Tuesday, today Hungary’s Peter Szijjarto meets Russian Foreign Minister Sergei Lavrov. Violence is on the rise again in eastern Ukraine and tougher sanctions against Russia remain a live possibility although EU foreign ministers limited themselves to targeting a few more Ukrainian separatists earlier this week.
Ukraine’s currency shed nearly 5 percent on Monday after a weekend that saw the heaviest shelling in a month of the main rebel stronghold in the east and signs that Moscow had dispatched troops and tanks to reinforce separatists. The prospect that a two-month-old ceasefire could collapse has helped drive the currency 12 percent lower since the central bank abandoned an unofficial peg a week ago.
Russian and Ukrainian energy ministers are due to meet European Energy Commissioner Guenther Oettinger in Brussels after presidents Petro Poroshenko and Vladimir Putin said they had agreed on the “basic parameters” of a deal to get gas flowing to Ukraine again this winter.