Ukraine said a forced inspection by the Russian navy on a Turkish cargo vessel threatened shipping in the Black Sea.

“These actions exemplified Russia’s deliberate policy of endangering the freedom of navigation and safety of commercial shipping in the Black Sea,” a Ukrainian Foreign Ministry statement said. The Russian navy on Sunday opened fire on the dry-cargo vessel Sukru Okan, which was bound for the Ukrainian Danube port of Izmail, to force it to stop for checks.

Russia’s central bank meanwhile called for an extraordinary meeting on Tuesday after the rouble crashed through the level of 100 to the dollar for the first time since March of last year as Russia’s war in Ukraine drags on and international sanctions hit trade.

Latest developments

• Russia calls emergency key rate meeting as rouble plunges
• Putin’s aide blames central bank for weaker rouble, inflation
• Dutch F-16s deployed as Russian jets flew toward Nato airspace
• Russia opens fire to force Black Sea cargo ship inspection
• Wheat markets shrug off Black Sea flashpoints as exports flow

Russia calls emergency key rate meeting as rouble plunges

Russia’s central bank called for an extraordinary meeting on Tuesday after the rouble crashed through the level of 100 to the dollar for the first time since March last year as Russia’s war in Ukraine drags on and international sanctions hit trade.

The central bank hiked its key rate by a percentage point to 8.5% last month, the first increase since emergency measures were imposed immediately after the invasion of Ukraine in February 2022.

The exchange rate has emerged as a barometer of health for an economy battered by shrinking export revenues and its isolation from international financial markets, bringing infighting between the government and central bank into the open.

The rouble reversed losses after the announcement, trading up 0.8% at 98.5975 at 5.36pm in Moscow. The currency, which had broken through 101 earlier on Monday, has weakened by about 27% this year for the third-worst performance in emerging markets. The central bank had sought to arrest the slump by saying it wouldn’t purchase foreign currency on the domestic market for the rest of 2023.

Kremlin economic aide Maxim Oreshkin blamed the central bank for contributing to the depreciation, an unusual rebuke made public just moments before the Russian currency broke through 100 to the dollar. Bank of Russia Governor Elvira Nabiullina has repeatedly cited deterioration in trade as the main reason for the rouble’s weakness.

The public airing of grievances hints at discord in the highest echelons of the Russian establishment over how to respond to a crash in the rouble that pulled it to levels last seen weeks after the invasion of Ukraine in February 2022.

Andrei Klishas, a senior legislator, said on Monday on his Telegram channel that the central bank needs to understand “the exchange rate is not only an economic indicator” but also “has a significant impact on the social rights of our citizens”.

Leading EU Russia critic Karins resigns as Latvian premier

Latvian Prime Minister Krisjanis Karins said he’ll resign his post as his party seeks to form a new government, handing the reins of the Baltic nation to a party ally to be announced this week.

Karins, who will remain in office until a new administration is formed, said he wouldn’t lead the next coalition after announcing on Friday that his New Unity party would seek a re-formed government. The party will nominate a candidate for the premiership on Wednesday, he said.

“For any country, there are difficulties when someone tries to hold on to their office,” Karins (58), told reporters in Riga on Monday. “That’s never been my goal.”

Prime minister since 2019, Karins is Latvia’s longest-serving head of government since it regained independence in 1991. One of the European Union’s most vocal critics of Russia, the US-born premier, a former member of the European Parliament, batted away questions from reporters about whether he harboured ambitions to enter EU politics in Brussels.

Wheat markets shrug off Black Sea flashpoints while exports flow

Wheat markets shrugged off a further escalation of tensions in the Black Sea after Russia said it fired on a cargo vessel over the weekend to stop the ship for checks.

Benchmark futures declined by 1.6%, erasing an earlier gain.

Ukraine said the vessel stopped — the Sukru Okan — was Turkish. A person familiar with the matter said the ship was empty and had unloaded a maize cargo the previous day in Greece. It was heading to the Ukrainian port of Izmail to load more grain and is currently docked in Romania, they said.

Traders are closely monitoring the region for any sign of a change in exports from two of the world’s largest grain suppliers. The incident marks the first time that Russia has targeted a grain ship since last month’s collapse of a deal allowing safe passage for Ukrainian exports. The Black Sea has recently become more risky, underscored by Russian threats to ships sailing to Ukraine, and Ukraine’s strike on an oil tanker near Russia.

“Despite all the attacks seen in the last fortnight, grains continue to flow from both sides,” Rabobank analyst Carlos Mera said. Spot prices have been depressed by strong availability due to large Russian exports, he said.

Ukraine’s Dragon Capital eyes bank seized from Russian tycoons

One of Ukraine’s few home-grown investment banks is considering making a bid for a nationalised lender should the government put the company up for sale after seizing it from a group of businessmen led by billionaire Mikhail Fridman.

Ukrainian authorities last month took over Sense Bank, the nation’s 11th-largest by assets, after sanctions were imposed on its Russian stakeholders. Now Kyiv-based Dragon Capital is exploring an acquisition, according to owner and CEO Tomas Fiala.

“We are potentially interested,” he said in an interview in his office in the Ukrainian capital on Thursday. “We will be looking probably to team up with some international co-investors to buy this bank because it’s quite large.”

With Sense Bank, the state’s share in banking assets has risen to about 56% as the government now owns five large lenders, including Privatbank, which was taken from Ukrainian tycoons Igor Kolomoisky and Gennady Bogolyubov in 2016. The size of the state’s presence has raised concerns with the International Monetary Fund, which has urged Kyiv to sell government-controlled lenders. DM