Ukraine Ceasefire Crumbles

KIEV/DONETSK, Ukraine (Reuters) -

Kiev accused pro-Russian rebels of opening fire with rockets and artillery at villages in southeastern Ukraine on Monday, all but burying a week-old European-brokered ceasefire deal.

The Ukrainian military said it could not pull weapons from the front as required under the tenuous truce, as long as its troops were still under attack.

Ukraine’s currency, nearly in freefall this month, fell a further 10 percent on Monday on fears that the truce could collapse. The central bank said it would tighten currency rules to sustain the currency. The value of Ukrainian debt also fell, with bonds now trading at 40 cents in the dollar.

The reported shooting came closer to killing off the truce, intended to end fighting that has killed more than 5,600 people, which rebels ignored last week to capture the strategic town of Debaltseve in a punishing defeat for Kiev.

Kiev and its Western allies say they fear the rebels, backed by reinforcements of Russian troops, are planning to advance deeper into territory the Kremlin calls “New Russia”. Moscow denies aiding the rebels.