World

UKRAINE UPDATE: 23 AUGUST 2023

Russian missiles strike Zaporizhzhia and Kryvyi Rih; Zelensky asks EU to end grain purchase bans

Russian missiles strike Zaporizhzhia and Kryvyi Rih; Zelensky asks EU to end grain purchase bans
Ukrainian President Volodymyr Zelensky. (Photo: EPA-EFE / Ida Marie Odgaard)

Russian missiles struck Zaporizhzhia and also Kryvyi Rih, the home of the country’s biggest steel company owned by ArcelorMittal, according to the Telegram channels of regional governors. The attacks knocked out power in some areas after missiles hit buildings and infrastructure.

Ukrainian President Volodymyr Zelensky said he told European Commission President Ursula von der Leyen that he wanted to normalise his country’s grain exports by next month after several member states were allowed to block purchases.

Zelensky also sought help from Balkan leaders to ensure his country’s access to the Black Sea and protect grain shipments blockaded by Moscow.

Latest developments

Russian general missing since Wagner mutiny ‘is removed from post’

A Russian general who hasn’t been seen in public since the mutiny by Wagner mercenaries that threatened President Vladimir Putin’s rule has been removed from his post, RBC news reports.

Sergei Surovikin (56) was relieved of his post as commander of Russia’s aerospace forces, but remains in the Defence Ministry, the news website reported, citing unidentified people familiar with the situation. He is no longer the deputy commander of military operations in Ukraine, RBC said, citing one person. The Defence Ministry didn’t immediately respond to a request for comment.

The general was quizzed by security officials over his links to Wagner leader Yevgeny Prigozhin following the short-lived revolt in June, a person with knowledge of the matter said at the time, as the Kremlin investigated whether elements in the military had knowledge of the uprising.

Prigozhin had repeatedly praised Surovikin’s leadership in Russia’s war in Ukraine, while demanding the ouster of Defence Minister Sergei Shoigu and Chief of the General Staff Valery Gerasimov.

Surovikin, a career military officer whose brutal reputation earned him the nickname “General Armageddon,” was last seen in a Defence Ministry video on 24 June, urging Prigozhin to end the uprising.

Putin tells government, central bank to control capital outflow

President Vladimir Putin demanded steps to control the outflow of capital from Russia and to reduce volatility in financial markets, warning of the threat from rising prices following the slump in the rouble.

The government and the Bank of Russia “need to work, among other things, to limit unproductive, speculative demand in the economy, control capital outflow, and monitor the behaviour of other financial market participants”, Putin said on Tuesday at a televised meeting with officials. The main task now is to monitor inflation, and officials should “actively use the tools at their disposal”, he said.

The rouble, the third-worst performing currency this year among emerging markets, broke through 100 per dollar at the start of last week. That forced the central bank to call an extraordinary meeting to hike the benchmark rate by 3.5 percentage points to 12% from 8.5% last week to shore up the currency. Authorities also moved to adopt informal capital-control measures by asking exporters to sell more of their foreign currency revenue.

The rate hike was also part of a wider effort to subdue inflation before presidential elections due in March, according to people with knowledge of the matter.

Russia’s seaborne crude flows drop to the lowest since January

Russia’s seaborne crude flows fell to their lowest since January after an unexplained slowdown at the Black Sea port of Novorossiysk, while the nation pledges to restrict its oil exports.

Average nationwide shipments in the four weeks to August 20 dropped to 2.84 million barrels a day, tanker-tracking data compiled by Bloomberg show. That’s about 1.05 million barrels a day below the peak in mid-May. More volatile weekly numbers also fell sharply, dropping to their lowest since December.

The amount of Russian crude loaded at Novorossiysk equalled the lowest volume since Moscow’s troops invaded Ukraine in February 2022. Shipments fell behind the scheduled programme last week, with two gale warnings issued for the area around the port. It does not appear that flows have been affected by Ukraine’s drone attacks on two Russian vessels in the northeastern Black Sea earlier this month, which briefly halted activity at the port at the time.

Rouble aftershocks unnerved even Russia’s least exposed neighbour

A brief crash in the rouble last week jolted the foreign-exchange market in Kazakhstan, underlining how risks can spread even to a neighbour deemed least vulnerable to flows of Russian capital.

The Russian currency reversed losses soon after the central bank called an emergency meeting and capital controls came back to the government’s agenda. It ended the week with the world’s biggest rally against the dollar.

By contrast, the Kazakh tenge’s plunge continued until Friday, a stretch during which it retreated more than any other currency globally apart from Argentina’s peso. When the Kazakh central bank tried to make sense of the depreciation, it found the declines were a “reaction to a weakening rouble,” Deputy Governor Aliya Moldabekova said in an interview.

The tenge was little changed on Monday against the dollar after appreciating by nearly 2% on Friday following five days of losses.

US backs sale to Poland of Apache helicopters in $12bn arms package

The US State Department has approved Poland’s request to purchase AH-64E Apache attack helicopters, engines and other equipment valued at as much as $12-billion.

Polish Prime Minister Mateusz Morawiecki last year announced plans to double the country’s spending on its military, and his country has been at the forefront of European allies calling for weapons deliveries to help Ukraine in its fight against Russia’s invasion.

In addition to the Apache helicopters, produced by Boeing in Mesa, Arizona, the proposed foreign military sale would include as many as 210 engines produced by GE Aviation, 1,844 AGM-114R2 Hellfire missiles and 460 AGM-179A Joint Air-to-Ground Missiles made by Lockheed Martin, as well as missile warning systems, radars and sensors.

The deal must still be approved by Congress and negotiated between Warsaw and the companies. DM

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