(Bloomberg) — Ukrainian President Volodymyr Zelenskiy said the Kremlin should pull back its troops to their positions before the Feb. 24 invasion to show it is ready to resume talks, even as Russia amassed forces for an offensive near the city of Zaporizhzhia and continued attacks in the Donbas region.
The Bank of Russia moved up its next interest-rate meeting by more than two weeks to Thursday as currency controls and high commodity prices have fueled the ruble’s surge against the dollar. Moscow may make foreign debt payments in local currency after the US Treasury Department let a waiver expire, pushing Russia closer to a default.
Ukrainian Foreign Minister Dmytro Kuleba said NATO is unlikely to help secure safe passage for agricultural shipments, while a Russian official said his country is ready for dialog over blocked grain freighters.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
- Mined Ports, Polish Red Tape Among Issues Stopping Ukraine Grain
- Russian Billionaire Investigated by UK for Sanctions Violations
- Russia Edges Closer to Default as US Says Key Waiver Will Expire
- Russia Set to Step Up Actions to Tame Rampant Ruble Rally
- Klitschko Boxing Heroes Warn That Returning to Kyiv Is Dangerous
- Oil’s Most-Prized Barrels Soar as Europe Switches Out Russia
All times CET:
Mined Ports, Red Tape Stopping Ukraine Grain (3:22 p.m.)
Resuming Ukrainian gain shipments will be time consuming given challenges that include mine-clearing in Black Sea ports and the need for cooperation from the very country that kicked off the war, Lithuanian President Gitanas Nauseda said.
“It could take weeks, not months, but if there will be no will of the Russians to open this window, it will be impossible,” Nauseda said in an interview Wednesday. “The Russians could use this instrument as yet another leverage to destabilize the situation in the world. They are highly interested to do as much harm as possible.”
Another option, Nauseda said, is to reroute Ukrainian grain through other ports in the region by rail, though that channel would be daunting. An “experimental train” sent from Ukraine via Poland to the Lithuanian port of Klaipeda took three weeks, he said.
Ukraine Seeks More Rocket Launchers as Donbas Front Deteriorates (2:41 p.m.)
Ukraine needs multiple rocket launch systems as soon as possible, Kuleba said on the sidelines of World Economic Forum in Davos. Delay will worsen an “extremely bad” situation in Donbas and prevent Ukraine from liberating the region around Kherson in the south, he said.
“We cannot allow Russia to stay in Kherson because if they do, they will have a strategic position to pose a threat to central Ukraine but also to southwestern Ukraine in the direction of Odesa, and they will keep stealing our grain.”
Military spokesman Oleksandr Motuzyanyk said that, while Russia has achieved some “tactical successes” in different areas, they are result of Ukrainian maneuvering and shouldn’t be mistaken for retreat by Kyiv’s forces.
Russia Offers Fast-Track Citizenship in Occupied Ukraine (2:07 p.m.)
Russian President Vladimir Putin signed a decree on Wednesday offering fast-track citizenship to residents of two occupied southern Ukrainian regions — Kherson and Zaporizhzhia.
Russia offered a similar path to citizenship in the breakaway eastern Donetsk and Luhansk regions, which about 860,000 people received prior to the Feb. 24 invasion of Ukraine. Russia is moving to annex Ukrainian territory it controls, according to occupation authorities and people in Moscow familiar with the matter.
Moldova Frets of Being Left Behind as Ukraine Vies for EU Entry (1:25 p.m.)
With all eyes on Ukraine as it strives to mount the first rung of the process to join the European Union, neighbor Moldova worries that its own push to join the bloc may be forgotten.
Pressing the message that Moldovans were ready to anchor themselves to a European future, Prime Minister Natalia Gavrilita said her country was pushing ahead with strengthening its institutions and bolstering the rule of law, key requirements to be considered an EU candidate.
“The time is now,” she said in an interview at the World Economic Forum in Davos, Switzerland. “The people of Moldova have voted massively for European integration a while before the war even started.”
Russia Welcomes Tribunal for Azovstal Defenders (1:20 p.m.)
Russia said it backs the establishment of a tribunal by its separatist allies to try Ukrainian defenders for war crimes after they surrendered at the Azovstal steel plant.
“We welcome the start of this process,” Russian Foreign Ministry spokeswoman Maria Zakharova said at her weekly briefing on Wednesday.
Russia said that 2,439 Ukrainian fighters surrendered last week at the final bastion of resistance in the port city of Mariupol. Moscow has said it is willing to consider swapping the detainees for captured Russians only after they are tried and convicted, a stance that may complicate Kyiv’s hopes of freeing its soldiers.
Citigroup Improves Russian 2022 Economic Forecast (1:18 p.m.)
Citigroup’s chief Russia economist revised the outlook for the country’s economic decline to 5.5% in 2022 from 9.6% previously due to recent data suggesting improved consumer strength and net-export performance.
“The original financial shock had weighed on sentiment, but the robust policy response by authorities supported a faster-than-anticipated return to normalcy,” Ivan Tchakarov wrote in a note.
Big Tech Lobbies EU to Send Ukraine Telecom Gear (12:21 p.m.)
A Tech lobby group that includes companies such as Amazon.com and Microsoft are urging the European Commission to do more to boost donations of telecom and data center equipment to Ukraine to replace infrastructure destroyed by the war.
Russia has targeted key communications infrastructure in Ukraine since the opening days of the invasion, when missiles struck TV towers and data centers around the country.
Belarus Exports Could Drop 30% This Year From War (11:22 a.m.)
Belarusian export revenue is poised to decline 30% this year, or by $14 billion, after the war led to foreign sanctions and a loss of access to Ukraine’s market, state-owned news agency Belta reported, citing First Deputy Prime Minister Nikolai Snopkov.
The country’s GDP declined 2.1% over the first four months of the year due to sanctions, Snopkov said. Belarus, which was already heavily sanctioned before the war, came under increased pressure as its authorities allowed the country to be used as a staging area for the invasion.
Lebedev Steps Down From UK News Board (11:01 a.m.)
Former KGB agent Alexander Lebedev stepped down from the board of a UK newspaper business that his son owns days after he was sanctioned by Canada, filings show.
The move underscores a tightening focus on his family amid the war in Ukraine that has become politically awkward for Prime Minister Boris Johnson. Johnson appointed Lebedev’s son Evgeny to the UK’s upper chamber of parliament as a Lord in 2020.
Russia, Iran Tighten Trade Ties (10:41 a.m.)
Russia said it is strengthening trade with Iran, boosting the economies of both nations as they contend with heavy US sanctions.
“We’re on track to raise trade, economic, logistics, investment, financial, banking cooperation, despite the unprecedented pressure that Russia is experiencing,” Deputy Prime Minister Alexander Novak said at a meeting with businesses in Tehran, Interfax reported. Trade between Russia and Iran rose by more than 10% in the first quarter, he said.
Russia May Make Foreign Debt Payments in Rubles (10:32 a.m.)
Russia plans to make foreign debt payments in rubles after the US Treasury Department let a key sanctions waiver that could force the country into default expire, State Duma Speaker Vyacheslav Volodin said, citing Russia’s experience requiring ruble payments for gas shipments.
“First of all, we have all the necessary monetary resources for payments,” Volodin wrote on his Telegram channel. “Secondly, we will pay in rubles.”
Russian Cruise Missile Strike as Zaporizhzhia Offensive Ramps Up (10:03 a.m.)
Cruise missiles hit industrial cities in Ukraine’s east as Russia intensified an offensive near Zaporizhzhia. The strikes killed one person and destroyed more than 60 houses in the city of more than 700,000 on the Dnipro river, the region’s administration said on Facebook.
Three missiles damaged a factory in the steel-making hub Kryvyi Rih, Dnipro region governor Valentyn Reznichenko said on Telegram. Russian missiles also fell on residential areas in Kramatorsk north of Russia-controlled Donetsk, a local official said.
Russia May Allow Corridor For Grain Shipments (9:41 a.m.)
Russia is ready for a dialog to resolve the situation with blocked grain freighters in Ukraine, Deputy Foreign Minister Andrey Rudenko said, Interfax reported. He reiterated Russia’s claim that Kyiv is to blame for the problem because it mined its ports.
Moscow has effectively blockaded Ukrainian ports, leaving the government in Kyiv struggling to get grain shipments out and sending prices to near-record highs.
Bank of Russia Reschedules Rate Meeting Amid Ruble Rally (9:04 a.m.)
Russia’s central bank moved its next interest-rate decision to 9:30 a.m. Thursday, after government officials suggested further monetary easing may be needed to help stem the ruble’s surge to highest since 2018.
The Bank of Russia has lowered the key rate twice since an emergency rate hike to 17% in the days after Russia’s invasion of Ukraine. The benchmark rate now stands at 14% and the next scheduled meeting wasn’t until June 10. The Economy Ministry said earlier this week that the ruble’s strengthening was nearing a peak.
Ukraine Seeks to Return all of Its Territories, Zelenskiy Says (8:55 a.m.)
Ukraine will fight until it returns all of its territory, Zelenskiy said via video link at a breakfast organized by the Victor Pinchuk Foundation in Davos.
Talks with Russia have stalled and Kyiv doesn’t see prospects for diplomacy until the Kremlin pulls its troops back to positions held before the invasion, according to Zelenskiy. Putin doesn’t “realize to the very end what is happening, he lives in his informational world,” the Ukrainian leader said.
West Should Back Full Victory for Ukraine, Kuleba Says (8:44 a.m)
Kuleba said his nation’s efforts to withstand the Russian invasion were to credit for a “reinvigorated” West on the world stage, and it should in turn fully back Ukraine’s desire to achieve a complete victory.
“We need the west primarily to finally accept the idea that the ultimate goal of this war should be the victory of Ukraine,” Kuleba said at the Victor Pinchuk Foundation breakfast. The government in Kyiv has previously expressed concern that some allies would prefer it agree to cede some territory.
Ukraine Sees No Will of NATO to Help With Naval Escorts (8:12 a.m.)
Kuleba said he saw no desire from NATO now to help secure safe passage of grains through the Black Sea, a crucial move as the world worries about food shortages and rising prices.
“I would wholeheartedly welcome the decision but I just don’t see the stamina and the bravery to take all the risks associated with this operation,” he said.
The interruption of Ukraine’s agricultural cycle risks a multi-year global food crisis, Kuleba said, “but in the end the problem is that you cannot trust Russia even if they sign papers guaranteeing safe passage.”
Russia and China Air Drill Rankles Neighbors (7:19 a.m.)
Japan’s top government spokesman Hirokazu Matsuno condemned a joint exercise held by Chinese and Russian war planes as a “heightened provocation.” The countries conducted a military drill Tuesday as US President Joe Biden finished an Asia trip, sending bombers and other aircraft south of the Korean Peninsula and over waters between Japan and South Korea, Seoul said, as it criticized the move.
China said its joint strategic air patrol with Russia didn’t target any third party and had nothing to do with the current international and regional situations, according to a statement from the defense ministry.
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