LONDON, Sept 17 (Reuters) - Ukraine's dollar-denominated government bonds fell on Tuesday amid rising political tensions in a dispute over the IMF-backed nationalisation of the country's largest lender PrivatBank in the wake of an arson attack on the ex-central bank chief's home.
Longer-dated issues bore the brunt of the losses with the 2032 issue dropping 1.6 cents to 103.61 cents in the dollar.
Ukraine's President Volodymyr Zelenskiy ordered an investigation after the home of a former central banker responsible for nationalising PrivatBank was torched in a nighttime attack in a village outside Kiev.
PrivatBank was nationalised in 2016 against the wishes of its ex-owner, Ihor Kolomoisky. The issue is closely watched by investors because the International Monetary Fund may freeze aid if the nationalisation is reversed.
Reporting by Karin Strohecker; Editing by Tom Arnold