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UKRAINE UPDATE: 23 MARCH 2023

Zelensky visits troops near besieged Bakhmut; Russia says its gold stash grew during war

Zelensky visits troops near besieged Bakhmut; Russia says its gold stash grew during war
Ukrainian President Volodymyr Zelensky (left) awards a serviceman as he visits the advanced positions of the Ukrainian military in the Bakhmut direction during a working trip to the Donetsk region at an undisclosed location in Ukraine, 22 March 2023. (Photo: EPA-EFE / Ukrainian Presidential Press Service handout)

Ukrainian President Volodymyr Zelensky visited frontline positions near the besieged city of Bakhmut in the eastern Donetsk region, a focus of fierce battles with the Russian army in recent months.

Ukrainian President Volodymyr Zelensky earlier condemned what he called “murderous” Russian strikes on Ukraine overnight using Iranian drones, as well as fresh missile attacks and shelling. He dismissed any talk of a possible ceasefire coming from the Kremlin after President Vladimir Putin’s meeting in Moscow with his Chinese counterpart, Xi Jinping.

“Every time someone tries to hear the word ‘peace’ in Moscow, another order is given there for such criminal strikes,” Zelensky said in a tweet. Ukraine’s General Staff said there had been a “massive” drone attack on the country, with Interfax-Ukraine reporting that a strike in Rzhyshchiv killed at least seven people and wounded nine. 

Key Developments

World Bank sees Ukraine’s recovery needs at $411bn 

The World Bank has increased its estimate of how much Ukraine will need for its recovery and reconstruction to at least $411-billion, based on damages inflicted during the first year of Russia’s invasion.

The new figure, from a joint assessment by the bank, the government of Ukraine, the European Commission and the United Nations, is equivalent to 2.6 times Ukraine’s projected 2022 gross domestic product. The assessment also found that the invasion pushed 7.1 million people into poverty and reversed 15 years of development progress. 

Blinken cites ‘acute’ threat from Russia  

US Secretary of State Antony Blinken told senators that the State Department needed its full budget request to tackle “the immediate, acute threat posed by Russia’s autocracy and aggression” and “the long-term challenge from the People’s Republic of China”.

But senators said the 11% budget increase sought for the department and the US Agency for International Development will be a tough sell, especially in the Republican-led House. The appearance before a Senate Appropriations subcommittee opened Blinken’s round of appearances before lawmakers to defend proposed spending for the year that begins on 1 October. 

Ukraine to allow foreign investors to repatriate coupon payments 

Ukraine will allow foreign investors holding domestic government bonds to repatriate coupon payments abroad starting on April 1, the central bank said in a statement on its website. 

The decision, discussed with the IMF, won’t put significant pressure on Ukraine’s reserves, the central bank said. A decision on repatriating principal payments has been postponed until there is “a significant easing of security and macroeconomic risks.”

Russia says gold stash grew during war 

Russia’s gold holdings jumped by one million troy ounces over the last year as the central bank bought the metal amid sanctions on its reserves imposed by the US and its allies over the invasion of Ukraine.

The Bank of Russia said it held 74.9 million ounces of gold at the end of February, unchanged from the previous month and up from 73.9 million a year earlier. Over the same period, total holdings of foreign exchange and gold dropped to $574-billion from $617-billion.

Deadly missile strike hits apartment building in Zaporizhzhia  

Russian forces killed at least one civilian and wounded 17 more, including two children, in a missile strike on a multistorey residential building in the southwestern Ukrainian city, regional Governor Yuriy Malashko said on television. It was one of six rockets launched at Zaporizhzhia on Wednesday, he said. 

 

 

 

Zelensky thanks troops near Bakhmut 

“I am honoured to be here today, in the east of our country, in Donbas, and to reward our heroes, to thank you, to shake hands,” Zelensky told Ukrainian troops near Bakhmut, according to an emailed statement from his office. 

He also posted a video on social media of what he said was the moment a Russian missile struck a residential building in the southern city of Zaporizhzhia on Wednesday. “Russia is shelling the city with bestial savagery,” Zelensky said.

Xi’s Moscow visit worries Poland  

Xi’s visit to Moscow “makes us concerned,” Polish Prime Minister Mateusz Morawiecki said in Warsaw after meeting Fumio Kishida, his Japanese counterpart.

“This Chinese-Russian axis is dangerous,” Morawiecki said. “We’re trying to convince China not to support Russia in its aggressive international policy,” he said, adding that he discussed with Kishida how to convince “countries of the South” not to support the Kremlin.

Russia sanctions critic leads in Slovakia poll 

A former Slovak premier who rejects sanctions against Russia and weapons deliveries to Ukraine is back in the lead six months ahead of a national election, according to an opinion poll. 

Robert Fico, who served three terms as Slovakian prime minister, edged ahead in a recent survey by pollster AKO. His Smer party has the backing of 17.6% of Slovaks, with the party of erstwhile political ally Peter Pellegrini, who succeeded him as premier, close behind. No party now in power had half that backing.

Russian assault on Bakhmut ‘losing momentum’ 

There is a “realistic possibility” that Russia’s attack on the eastern city of Bakhmut is losing momentum, partly because some Russian units have been moved to other sectors, according to the latest Defence Intelligence update from the British government.  

“Fighting continues around the town centre and the Ukrainian defence remains at risk from envelopment from the north and south,” the Ministry of Defence in London said in a tweet.

 

 

 

Russia wields new currency tool  

Russia’s central bank is making it more costly for commercial lenders to have liabilities in what it calls “unfriendly” currencies by raising mandatory reserve requirements for foreign tender such as US dollars and euros. 

The monetary authority boosted the amount of money that banks must set aside as reserves for “unfriendly” currencies to 7.5% while cutting it for others to 5.5%, effective on April 1. It was the first time that the central bank differentiated the ratios. Previously, the requirement was 7% for all foreign currencies. The ratio for rouble liabilities is 4%.

Ukraine success ‘brings peace closer’  

Although Zelensky has stopped short of rejecting China’s initiative to end the war, he said Tuesday evening that a ceasefire, one of its central elements, wouldn’t work. He said in a tweet on Wednesday that the success of Ukraine’s forces “really brings peace closer”.

The US and other nations supporting Ukraine have rejected the plan, which they say would let Russia hold territory it seized in Ukraine. A US spokesman tore into Xi for “parroting” Russia’s position.

Japan’s Kishida pledges strong support  

Kishida, making his first visit to Kyiv since Russia’s invasion, on Tuesday, offered strong support to Ukraine and invited Zelensky to take part in the Group of Seven summit in mid-May. Zelensky agreed to participate via video link. 

Kishida made the trip to Kyiv after stopping in New Delhi to pressure Indian Prime Minister Narendra Modi to join other leaders in shunning Russia over its aggression. Japan is set to host the G7 summit in Hiroshima.

IMF agrees to $15.6bn wartime loan 

Ukraine won staff backing for a $15.6-billion credit from the International Monetary Fund, setting up the first loan to a nation at war in the institution’s 77-year history.

The IMF and the government in Kyiv reached a staff-level agreement on a comprehensive loan programme over four years, the Washington-based lender said in an emailed statement on Tuesday. The agreement is expected to be finalised with the approval of the IMF board in the coming weeks. DM

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