Russia threw Ukraine an economic lifeline on Tuesday, agreeing to buy $15 billion (£9.23 billion) of Ukrainian debt and to reduce the price its cash-strapped neighbor pays for vital Russian gas supplies by about one-third.
The deal, reached at talks in Moscow between the Russian and Ukrainian leaders, is intended to help Ukraine stave off economic crisis though Moscow will hope it keeps Kiev in its political and economic orbit.
The agreement could also fuel protests in Kiev against Ukrainian President Viktor Yanukovich, who faces accusations of "selling" Ukraine to the highest bidder after spurning a trade deal with the European Union and turning to Moscow for help.
Finance Minister Anton Siluanov said Russia would tap a National Welfare Fund - a rainy day fund - and use the $15 billion to buy Ukrainian eurobonds.
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The deal boosted the price of Ukraine's dollar debt, a sign of investors' confidence.
"Needless to say, financial markets are likely to rally as the immediate threat of a balance of payments crisis recedes," Neil Shearing, chief emerging markets economist at Capital Economics in London.
"But considerable risks to the outlook remain."