Russian Ruble
A picture illustration of a section of a Russian 100-rouble banknote taken in Moscow on July 8, 2014. Reuters/Sergei Karpukhin

Russia canceled its first ruble bond auction in three months Tuesday after borrowing costs soared as the U.S. and the European Union consider further sanctions related to the country's involvement in the rapidly deteriorating Ukraine crisis.

Russia’s financial markets are paying for President Vladimir Putin’s involvement with ethnic Russian rebels inside Ukraine who are widely suspected to have shot down Malaysia Airlines Flight 17 over the eastern part of the country last week.

The Russian Finance Ministry said the auction scheduled for Wednesday would no longer take place, citing “negative market conditions,” in a statement online.

The yield on the ruble debt due February 2027 fell nine basis points to 9.14 percent Tuesday afternoon in Moscow after rising more than 19 basis points Monday.

The Finance Ministry has canceled several ruble auctions this spring, including three in February alone when the ruble slid to record lows against the dollar and drove up borrowing costs.