Turkish President Recep Tayyip Erdoğan said he aims to revive and expand the scope of the deal that allowed Ukraine to export grain via the Black Sea, calling on Western countries to help turn the initiative into a basis for peace.

German defence company Rheinmetall bought about 30 Leopard 1 A5 battle tanks from a Belgian company on behalf of the German government as part of a package of military hardware for Ukraine unveiled at last month’s Nato summit.

Latest developments

• Blast injures dozens at Rostec optics plant site near Moscow
• Rheinmetall buys Leopard 1 battle tanks for Ukraine
• Bank of Russia halts forex buys as rouble slumps
• Turkey seeks ‘expanded’ grain deal as step to peace in Ukraine
• Russia moves to boost army near Europe after Nato expansion

Blast injures dozens at Rostec optics plant site near Moscow

A blast at a fireworks company outside Moscow injured at least 56 people at the site of a plant controlled by the Rostec industrial and defence holding.

The explosion happened on Wednesday at a fireworks production and storage site at the Zagorsk Optical-Mechanical Plant in the town of Sergiev Posad, according to Moscow Region Governor Andrey Vorobyov.

The plant is a unit of Rostec’s Shvabe Holding that is responsible for the development and output of optical-electronic systems for military and civilian use. It was producing optical equipment including for Russian defence forces until at least 2021, according to annual reports before Russia halted disclosure of corporate data following the invasion of Ukraine.

Vorobyov said in televised comments on Wednesday that the plant had not focused on optics production for a long time.

There was no indication the blast was caused by a drone attack or foul play, and an investigation into possible violations of industrial safety rules was taking place, Russia’s federal Investigative Committee said in a statement.

Rostec said that the blast occurred at a warehouse owned by a private company whose premises are adjacent to the Zagorsk plant, causing damage to its premises. The Interfax news service reported that one of the injured later died in the hospital, citing local authorities.

Bank of Russia halts forex buys as rouble slumps

The Bank of Russia announced it will halt purchases of foreign currency on the domestic market for the rest of 2023 in an effort to help the rouble as the currency slumped towards 100 per dollar, its weakest in 16 months.

“The decision was made in order to reduce the volatility of financial markets,” the central bank said in a statement late on Wednesday.

The bank won’t buy forex on the domestic market as part of mirroring operations with the Finance Ministry under Russia’s budget rule, which was put in place to insulate the economy from swings in commodity prices. It will continue to sell foreign currency related to the use of funds from the National Wellbeing Fund, the central bank said.

The rouble has weakened by about 24% against the dollar so far this year, placing it among the three worst emerging-market performers with the Turkish lira and the Argentine peso. The currency weakened past 98 per dollar during trading on Wednesday and is nearing 100 to the greenback, a level last seen during the first month after President Vladimir Putin ordered the February 2022 invasion.

Rheinmetall buys Leopard 1 battle tanks for Ukraine

Rheinmetall has bought about 30 Leopard 1 A5 battle tanks from a Belgian company on behalf of the German government as part of a package of military hardware for Ukraine unveiled at last month’s Nato summit.

A spokesman for the Dusseldorf-based arms manufacturer confirmed the purchase, which was first reported by the Handelsblatt newspaper. He declined to provide further details.

Chancellor Olaf Scholz’s government announced the €700-million package of additional support for the Ukrainian military, including 25 Leopard I tanks and five armoured recovery vehicles, at the Nato meeting in Vilnius.

Russia moves to boost army near Europe after Nato expansion

Russia will boost its military forces near its borders with Nato states, Defence Minister Sergei Shoigu said as he lashed out at the US and its allies for providing support to Ukraine.

Shoigu told a meeting of defence officials on Wednesday that “strengthening of troop formations” on Russia’s western borders was necessary in response to what he said was a buildup of forces by Nato countries.

He singled out the “militarisation of Poland” and said the entry of Finland and Sweden to Nato membership would be “seriously destabilising” for Russia’s security. Taking into account the armed forces of eastern European countries, about 360,000 service people are stationed in the immediate vicinity of the borders of Russia and its ally Belarus, he said.

Shoigu complained that deliveries of arms to Ukraine by the US and its allies “creates serious risks of further escalation of the conflict.” He didn’t acknowledge that Russia had started the war.

Russia is China’s ‘raw material appendage’, says Ukraine envoy 

Russia is increasingly playing a junior role to China in a relationship that’s largely about Beijing’s desire for resources, Ukraine’s ambassador to Beijing said.

“For China, Russia is both a political partner and a source of resources,” Pavlo Riabikin said in an interview on Tuesday with the RBC Ukraine news agency.

“Moscow’s relations with Beijing are a marriage of convenience in which the Russian Federation turns into a raw material appendage for China,” he said.

The comments come as China’s imports of key energy commodities from Russia surge to all-time highs and Western buyers shun such shipments due to the war in Ukraine. Oil flows from Russia hit 10.5 million tonnes in June, up by more than 40% on-year.

Turkey seeks ‘expanded’ grain deal as step to peace in Ukraine

Turkish President Recep Tayyip Erdoğan said he aims to revive the Black Sea grain deal with an “expanded scope,” calling on Western countries to help turn the initiative into the basis for peace between Russia and Ukraine.

“We had another chance to learn first hand Russia’s demands and expectations during a phone call with” Russian President Vladimir Putin,” Erdoğan said in Ankara late on Tuesday, adding that the two leaders shared a “sensitivity” on the need for grain to reach Africa.

Contacts to restart the initiative “with an expanded scope” were ongoing but a solution depended on Western countries “fulfilling their promises”, he said, without specifying which commitments had been broken.

“Unfortunately, in the previous period, the principle of loyalty wasn’t observed. No diplomatic steps were taken to turn the positive atmosphere created by the Black Sea initiative into a ceasefire and then permanent peace.”

Overflowing Russian grain ports show risk of Black Sea escalation

Russian grain ports are overflowing after two big harvests. That means any military escalation in the crucial Black Sea risks depriving the world of huge amounts of crops it’s counting on.

Port capacity is being stretched as the wheat giant struggles to clear the volumes despite massive exports. Russia shipped 4.4 million tonnes of wheat in July, a record for the month and almost 60% above average, according to consultant SovEcon.

Some terminals on the Azov Sea stopped accepting grain because of a lack of storage capacity, SovEcon said. That’s a problem for farmers if the situation in the Black Sea between Ukraine and Moscow worsens and slows Russian flows, because they’ll have nowhere to send their harvest that’s critical to global food supplies.

Top wheat shipper Russia, which last month exited a deal allowing Ukraine to export from Black Sea ports, moves most of its grain through the waterway. The country started the export season with the largest wheat stockpile in three decades, according to the US government. The big supplies have helped make Russian wheat among the world’s cheapest.

Any escalation in the Black Sea could have big knock-on effects for global grain trade. Kyiv hit a Russian oil tanker over the weekend and warned that more attacks could follow, as it seeks to retaliate for the Kremlin’s efforts to cripple Ukrainian grain exports. That may make some shipowners more cautious about calling at Russian Black Sea ports. DM