Ukraine Latest: Russia Pledges to Open Sea Corridors, Kyiv Wary

  • In Business
  • 2022-05-26 02:04:56Z
  • By Bloomberg

(Bloomberg) -- Russia said it's opening corridors for shipping from seven Ukrainian ports amid growing international criticism of an unfolding global food crisis triggered by its blockade. Kyiv warned that security issues could still prevent free passage.

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Ukrainian Foreign Minister Dmytro Kuleba spoke at the World Economic Forum in Davos and said peace negotiations with Russia are going "nowhere." He compared Moscow's offensive in the eastern Donbas region to a World War II battle.

The Bank of Russia moved up its next interest-rate meeting by more than two weeks to Thursday. Moscow may make foreign debt payments in local currency after the US Treasury Department let a waiver expire, pushing Russia closer to a default.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

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  • Russia Says It's Opening Sea Corridors From Ukraine Ports

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All times CET:

Russia Poised to Act Against Ruble Rebound That's Gone Too Far (3:29 a.m.)

Russia is racing to stem a rally in the ruble and is poised to accelerate interest-rate cuts as officials increasingly view the currency's rebound as an economic threat.

An unscheduled policy meeting for Thursday has spurred expectations for a big reduction, and the possibility that capital restrictions may be loosened further. The ruble swung to a loss of as much as 6.6% versus the dollar in Moscow trading after the announcement, ending a five-day gain.

Russia Says It's Opening Sea Corridors (9:01 p.m.)

Humanitarian maritime corridors from Black Sea and Sea of Azov ports including Odesa will operate from 8 a.m. to 7 p.m. daily, Mikhail Mizintsev, a Defense Ministry official said according to an emailed statement. But shipments may not begin moving quickly because Ukraine would have to remove its mines after seeking assurances of protection from Russia's Black Sea fleet.

The head of the UN's World Food Program, David Beasley, said Monday that Russia's blockade of Ukrainian ports, preventing shipments of grain from the country, is a "declaration of war" on global food security.

The interruption of Ukraine's agricultural cycle risks a multi-year global food crisis, Kuleba said at Davos, "but in the end the problem is that you cannot trust Russia even if they sign papers guaranteeing safe passage."

Ukraine's Kuleba Warns Davos Russia Poses Broader Risks (8:45 p.m.)

Kuleba if the issue of security guarantees for Ukraine isn't resolved in one way or another, "there will always be a risk of war in Europe as long as Russia remains Russia."

He said Ukraine needs security guarantees and that while its continued aspiration to join NATO "did not fly," it needs "something now." Kuleba said his country is upset that a sixth round of European Union sanctions against Russia is "hanging in the air" because of Hungary's resistance to an embargo on Russian oil purchases.

War Crimes Advisory Group Created to Aid Ukraine (6:55 p.m.)

The EU, UK and US announced the creation of the Atrocity Crimes Advisory group will aim to ensure "efficient coordination of their respective support to accountability efforts on the ground," according to a joint statement.

"The overarching mission of the ACA is to support the War Crimes Units of the Office of the Prosecutor General of Ukraine in its investigation and prosecution of conflict-related crimes," according to the statement.

Dutch May Join Naval Escorts if Russia Commits (6:41 p.m.)

The Netherlands would consider joining an alliance to send warships to escort grain supplies stuck in Ukrainian ports but would need assurances from Russia and, ideally, involvement by Turkey, according to the Dutch defense minister.

"If there is any way to make it happen, and if the Netherlands were asked to play a part, of course I would be very happy to be part of such an alliance," Dutch Defense Minister Kajsa Ollongren told Bloomberg on the sidelines of the World Economic Forum. "But we're not there yet unfortunately."

Putin Says Economy Doing Better Than Some Expected (5:15 p.m.)

Russia's economy is doing better than some forecasters expected, Putin told officials, although he added this year remains "not easy."

"Our economy's trend is significantly better than some experts forecast," he told a televised Kremlin meeting, saying inflation this year won't exceed 15%. He didn't mention the government's prediction that output will contract by 8% this year under pressure from Western sanctions imposed over his attack on Ukraine.

Putin Visits Military Hospital for First Time During War (5:11 p.m.)

Putin met doctors and wounded soldiers at a Moscow military hospital in his first such visit since he ordered the invasion of Ukraine three months ago. The wounded soldiers he met were dressed in matching pajamas and had no visible injuries in photographs on the Kremlin website and broadcast on state TV.

Russia hasn't announced casualty figures since March 25, when it said 1,351 soldiers died and 3,825 were wounded in fighting in Ukraine. The UK Defence Ministry estimated this week that about as many Russians have been killed as in the Soviet Union's 9-year war in Afghanistan, when about 15,000 soldiers died.

Russia Offers Fast-Track Citizenship in Occupied Ukraine (4:51 p.m.)

Putin signed a decree on offering fast-track citizenship to residents of two occupied southern Ukrainian regions -- Kherson and Zaporizhzhia. Ukraine condemned the move, with the Foreign Ministry saying that "illegal" distribution of Russian passports violates its sovereignty, territorial integrity and international laws.

Russia offered a similar path to citizenship in the breakaway eastern Donetsk and Luhansk regions, which about 860,000 people received before 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.

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."

Ukraine Seeks More Rocket Launchers as Donbas Front Deteriorates (2:41 p.m.)

Ukraine needs multiple rocket launch systems as soon as possible, Foreign Minister Kuleba said on the sidelines of World Economic Forum. 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."

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 . "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.

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 Inc.'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.

Big Tech Lobbies EU to Send Ukraine Telecom Gear (12:21 p.m.)

A Tech lobby group that includes companies such as Inc. and Microsoft Corp. 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.

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.

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 Return of All of Its Territories, Zelenskiy Says (8:55 a.m.)

Ukraine will fight until it returns all of its territory, President Volodymyr 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.

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.

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.

Read more: Joint Russia-China Air Drill During Biden Trip Rankles Neighbors

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