KYIV - Ukraine's hryvnia currency weakened another 1% to 29.4 to the dollar on Wednesday, extending a similar loss the previous day due to growing fears of a Russian military offensive, Refinitiv data showed.

The hryvnia is now at its lowest level since February 2015 when heavy fighting between Ukrainian troops and Russian-backed separatist fighters in the country's east weighed on the currency. It has weakened about 8% since the start of 2022, Refinitiv data shows.

Ukraine is bracing for a possible Russian offensive after Moscow formally recognised two breakaway regions of eastern Ukraine as independent and said it was deploying troops into the area.

Ukraine's security council chaired by President Volodymyr Zelenskiy decided on Wednesday to impose a state of emergency in the country. 

The government and the central bank said the state of emergency would not interrupt business and financial activities.

Central Bank Governor Kyrylo Shevchenko told Reuters earlier this week that the bank does not plan to introduce any administrative restrictions on the currency market and would continue to sell dollars to smooth the hryvnia volatility.

(Reporting by Natalia Zinets; editing by Matthias Williams and Mark Heinrich) ((;))