(Bloomberg) — The central bank in Moscow slashed interest rates and forecast sanctions would trigger a bigger economic drop than expected before the war, while Germany signaled it wouldn’t oppose a European Union embargo on Russian oil.
Still, Russia appeared on track to avoid a looming sovereign default after tapping its domestic dollar reserves to make payments on two foreign bonds that had been blocked by sanctions.
The leaders of Russia and Ukraine plan to attend the Group of 20 summit in November, according to Indonesia’s president, although Moscow refused to say if President Vladimir Putin would be there. The battle for Donbas remains Russia’s strategic focus, and territorial gains have been slow in the face of stiff Ukrainian resistance. But Russian missiles struck Kyiv Thursday evening. Odesa was also hit.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
- Putin’s Gas-for-Rubles Gambit Hits EU Fault Lines as Stakes Rise
- Alarmed by Russia’s Aggression, Europe Rethinks Its China Ties
- Habeck Says Germany Won’t Block a Russian Oil Embargo
- A Visual Guide to the Russian Invasion of Ukraine
- Russia Surprises With Bigger Rate Cut and Warns on Downturn
Ukraine Economy Minister Calls Fuel Shortage Temporary (6:35 p.m.)
Ukraine’s government will be able to restore fuel supplies within a week after Russian strikes on oil refineries and storage facilities, Economy Minister Yulia Svyrydenko said.
Her comments came amid growing concern among Ukrainians that buying fuel will become even more difficult, at least in cities such as the capital Kyiv, where demand is rising as people return to their homes after Russian troops pulled back. Long lines of cars at filling stations have become a common occurrence. “Within the next seven days a deficit will be eliminated, as operators have the contracts signed in Western Europe,” she said. “And now we are solving an issue of transportation to Ukraine.”
Separately, Yuriy Vitrenko, chief executive officer of Ukraine’s state-run energy company Naftogaz, told Bloomberg Television that he expects Russian gas flows to Europe to continue.
U.S. Training Ukrainians on Howitzers Outside Country (5:45 p.m.)
The U.S. is training Ukrainians how to use the howitzers being sent for their fight against Russia, an American defense official told reporters, but is doing so outside of the country and isn’t going in to transport them.
The official also said the first batch of Phoenix Ghost attack drones are set to arrive in the region Friday. The U.S. Air Force fast-tracked production of the drone made by closely held Aevex Aerospace to meet Ukraine’s needs.
Ukraine Vows to Eliminate Fuel Shortage (5:30 p.m.)
Economy Minister Yulia Svyrydenko said that a fuel shortage caused by Russian strikes on Ukrainian storage facilities and oil refineries will be taken care of within a week. “Operators have signed contracts in western Europe” and “we are solving an issue of transportation,” she said.
Ukrainians are concerned fuel will become harder to find in cities like Kyiv where demand has been rising since people started to return to their homes following the withdrawal of Russian troops.
Moldova Working to Prevent Insecurity Spilling Over (4:35 p.m.)
“Moldova is not about to become an immediate or imminent target for hostile military action,” Foreign Minister Nicu Popescu told Bloomberg TV, after a series of explosions across the pro-Kremlin breakaway territory of Transnistria at the start of the week.
He said it’s likely that internal forces were trying to stoke tensions and destabilize the country, adding “we are working full time to keep the situation calm.”
Russia Moves to Dodge Default With Claim Payment Made (4:24 p.m.)
Russia’s Finance Ministry said dollar payments on two foreign bonds are progressing after sanctions held them up for weeks. The amounts were $564.8 million on a 2022 Eurobond and $84.4 million on a 2042 bond. The development could sidestep a sovereign default that had looked all-but inevitable.
Czechs Refuse to Pay in Rubles, Talk With Poland on Pipeline (2:51 p.m.)
The Czech Republic will not pay for Russian gas in rubles, Prime Minister Petr Fiala said on Friday, calling accepting Russia’s terms is “dangerous” and breaching EU sanctions. The Czechs, who buy more than 90% their gas from Russia, will start talks with Poland on a gas pipeline project designed to diversify supplies and may purchase capacity at Polish liquefied natural gas terminals Fiala said.
Romania Says Pro-Russian Hackers Attack Websites (2:29 p.m.)
Romania said a pro-Russian hacking group attacked websites operated by its Defense Ministry, state railway company, border police and a financial institution.
The European Union and NATO member’s intelligence agency said the group, known as Killnet, took credit for so-called distributed denial-of-service attacks, shutting down the sites for several hours. Romanian parliament Speaker Marcel Ciolacu said this week that Bucharest is considering options for potential military aid to neighboring Ukraine.
Russia Surprises With Bigger Rate Cut and Warns on Downturn (1:28 p.m.)
Russia’s central bank cut interest rates more than forecast and indicated that borrowing costs may fall even lower, as priorities shift to supporting an economy derailed by international sanctions over Putin’s invasion of Ukraine.
Three weeks after reversing part of the emergency hike delivered after the attack, the Bank of Russia lowered its benchmark to 14% from 17%. Most economists surveyed by Bloomberg predicted a decrease to 15%. Policy makers warned the economy may face two straight years of contraction.
Policy makers issued new projections on Friday that showed the economy may contract 8% to 10% this year and end-year inflation could spike to as high as 23%.
Kuleba Says He Discussed Further Arms Supplies With U.K. (1:37 p.m.)
Ukrainian Foreign Minister Dmytro Kuleba said he discussed further arms supply to Ukraine with British Foreign Secretary Liz Truss. They also “agreed on the need to impose a real embargo on Russian oil imports to Europe as soon as possible” and the issue of security guarantees.
U.S. Citizen Killed Fighting in Ukraine, ABC Reports (12:57 p.m.)
Former U.S. Marine Willy Joseph Cancel was killed in Ukraine while fighting Russian forces alongside Ukrainian troops, ABC News reported. Cancel, a 22-year-old U.S. citizen, “was eager to volunteer” to fight against the invasion, ABC said, citing his wife.
Kremlin Declines to Say if Putin Will Attend G-20 (12:52 p.m.)
Russia is preparing for the Group of 20 summit in Indonesia but it’s too early to discuss details of its participation, Kremlin spokesman Dmitry Peskov told reporters on a conference call, in response to questions on the possibility of Putin meeting Ukrainian President Volodymyr Zelenskiy there.
Indonesian President Joko Widodo said earlier he’d invited both to the November summit in Bali and “expressed my hope that the war can end soon.” Putin assured him Russia “would do everything necessary and everything possible” to contribute to the success of the event, Peskov said, with no further details.
Norway Joins EU Sanctions With Russian Transport Ban (12:50 p.m.)
Norway joined the European’s latest sanctions package on Friday by introducing a ban on Russian road transport and on docking by the neighboring country’s vessels in response to the war in Ukraine, the government said.
Sweden Sees Two Russian NATO Narratives (11:49 am.)
Russia has offered conflicting narratives around the potential NATO membership of Sweden and Finland, said Swedish Foreign Minister Ann Linde.
Russia has warned the Nordic countries of “consequences” if they join the defense alliance, yet Moscow has at the same time downplayed the importance of whether NATO has 30 or 32 members, Linde said at a press conference in Helsinki with her Finnish counterpart Pekka Haavisto.
Swedish and Finnish policy makers have agreed to seek entry into the NATO defense bloc simultaneously in mid-May, according to reports this week.
Putin, Zelenskiy Plan to Attend G-20 Summit, Indonesia Says (10:54 a.m.)
Indonesia’s president said Volodymyr Zelenskiy and Vladimir Putin have accepted invitations to attend the Group of 20 summit in Bali in November. It’s unclear if either or both will attend in person.
Joko Widodo spoke with Putin on Friday, saying he “stands ready” to help with peace negotiations. He extended the invitation to Zelenskiy during a phone call earlier this week.
Russia is a G-20 member; Ukraine is not. The host nation typically invites leaders from a handful of non-member states to attend as observers.
Uniper May Pay for Gas in Euros (10:30 a.m.)
The German utility Uniper SE may pay for natural gas in euros to an account in Russia, a company spokesman said Friday. The company said it considers a payment conversion from euros to rubles compliant with sanctions law and Russia’s recent payment decree to be possible.
Moldova Will Increase Defense Spending (10:30 a.m.)
President Maia Sandu said Moldova plans to increase defense spending and improve the condition of the military in Europe’s poorest nation. Moldova has allocated about 46 million euros ($48.6 million) for military spending in this year’s budget.
“What’s happening in Ukraine proves to us that war is now something possible, and we need to protect ourselves,” Sandu told the lisa.md news website. “We cannot have a large army because we’re a small country, but we need to have an army that has the capacity to ensure the security of our citizens.”
Moscow-Backed Transnistria Says Military Unit Attacked
German Voters Backs Heavy Weapons for Ukraine (10:00 a.m.)
A majority of Germans now supports the government’s move to supply Ukraine with heavy weapons to help repel Russia’s invasion, according to a poll for public broadcaster ZDF.
Among 1,170 voters surveyed randomly by telephone April 26-28, 56% said they’re in favor of sending weapons like tanks and 39% said they’re against, the poll showed. In last month’s survey, 63% were against and 31% in favor. After initially resisting sending heavy weapons, Chancellor Olaf Scholz’s government has approved the supply of 50 anti-aircraft tanks to Ukraine by the vehicle’s German manufacturer and said similar deliveries will follow.
Russia Offers Dual-Payment Plan for Trade With India (8:42 a.m.)
Russia has offered India a dual-payment mechanism to allow more trade in local currencies, according to people with knowledge of the matter.
The latest offer from Moscow involves payment for Indian oil imports from Russia in dollar or euro while the rest of the trade will be settled using a rupee-ruble-denominated mechanism, the people said.
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