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UKRAINE UPDATE: 26 SEPTEMBER 2023

Kyiv drones strike Russia’s Kursk; Ukrainian grain reaches Turkey through the Black Sea

Kyiv drones strike Russia’s Kursk; Ukrainian grain reaches Turkey through the Black Sea
Children walk among debris at the site of a damaged factory after overnight shelling in Odesa, southern Ukraine, on 25 September 2023. (Photo: EPA-EFE / Igor Tkachenko)

Ukrainian forces carried out attacks around Kursk with drones to strike a building used by Russia’s domestic security services, Ukrainska Pravda reported, citing a source in Ukrainian military intelligence.

Two Ukrainian unmanned aerial vehicles were shot down over the Belgorod and Kursk regions, Russia’s Defence Ministry said in a Telegram post.

A second ship carrying Ukrainian grain reached Turkey through the Black Sea, France 24 reported on Sunday, despite threats by Russia to attack Ukrainian ships trying to make the voyage.

A high-profile Russian critic of the Ukraine war, Vladimir Kara-Murza, was moved to a maximum security prison in Siberia and placed in isolation, the BBC reported, citing his lawyers. He was sentenced in April to 25 years for treason, after giving a speech in the US critical of Russia’s invasion of Ukraine.

Russian Foreign Minister Sergey Lavrov called Ukrainian proposals for restoring its pre-invasion territory “unrealisable” and said that if Ukraine’s allies want war, they can have it. “If you insist on the battlefield, okay, let’s decide it on the battlefield,” Lavrov said at a news conference in New York. Lavrov also said there was little hope of reviving a deal to allow for the export of Ukrainian grain through the Black Sea.

Latest developments

German firm’s Russia LNG contract should end, says official 

A top official in Germany’s economy ministry said a nationalised firm — formerly part of Gazprom — should end its agreement to deliver liquefied natural gas from Russia as controversy grows over the company’s ties.

Securing Energy for Europe, known as SEFE, has a legacy contract that it “has been trying to get rid of in different ways”, according to Philipp Steinberg, who heads the ministry’s department for economic stabilisation and energy security.

“This is something that needs to be terminated asap,” he wrote on social media platform X, noting that the government has to deal with “certain facts”.

Germany nationalised the company at the height of Europe’s energy crisis last year. The firm was the focus of criticism last week, when it emerged that it is trading a cargo of LNG produced by the Yamal facility in Siberia.

Ukraine advances on Russian defences as US battle tanks arrive

Ukraine’s military said its troops made advances along the southern frontline against entrenched Russian defences as US battle tanks arrived to bolster the four-month-old counteroffensive.

Kyiv’s forces moved forward near the village of Verbove in the southern Zaporizhzhia region, with troops pushing toward the occupied Russian strongholds of Tokmak and Melitopol farther south, according to the Ukrainian General Staff. The Institute for the Study of War called it a “tactical breakthrough”, though it said the situation was fluid.

Ukrainian President Volodymyr Zelensky meanwhile confirmed the delivery of US Abrams tanks.

“The Abrams have already arrived in Ukraine and are getting ready to strengthen our brigades,” he said on Telegram on Monday after a meeting with top officials to discuss the security situation.

The Ukrainian leader said last week that his military would continue with the counteroffensive through the autumn and into winter, vowing to keep the pressure on Russian forces. He said Ukraine would “de-occupy two more cities”, though he didn’t identify them.

Elsewhere, Russia launched a heavy missile and drone attack on the Odesa region on the Black Sea overnight, killing at least two and damaging port infrastructure, grain storage facilities and warehouses, local authorities said. Last week Russia sent a barrage of missiles and drones to target energy infrastructure in central and western Ukraine, prompting electricity outages, Kyiv said.

Ukraine has targeted Russia’s supply lines, including in Crimea. The US administration told Zelensky it would provide a small number of long-range ATACMS missiles.

Russia’s diesel exports dropped by almost 30% before export ban

Russia’s daily diesel exports plunged by 28% in the first 20 days of September, before the government banned overseas shipments of the fuel in a move to curb domestic prices.

The nation’s oil companies exported an average of about 65,700 tonnes of diesel a day from 1-20 September via seaports and railways, according to a person with knowledge of the matter. That compares with an average of some 91,800 tonnes a day for most of August.

Russia, the world’s biggest seaborne exporter of diesel-type fuels, shocked global markets last week by imposing a temporary ban on overseas supplies of the road fuel as it struggles to rein in surging prices at home. The restrictions came into force on 21 September and have no expiry date.

Russia’s government subsequently amended the ban, excluding bunker fuel, gas oils and some middle distillates, according to a decree published in the nation’s legal database.

Ukrainian central bankers see more policy easing, minutes show

Ukrainian policymakers agreed that there was room for more policy easing as the central bank seeks to reduce the key rate to 18% by the end of this year, even as it acknowledged a deterioration in the balance of risks.

Officials led by Governor Andriy Pyshnyi trimmed borrowing costs by two percentage points to 20% this month after inflation dropped into single digits. Nine of the 11 Monetary Policy Committee members supported the move, while two were in favour of cutting the rate to 19%, a summary of the 14 September meeting published on the bank’s website on Monday showed.

The National Bank of Ukraine plans to continue the rate-cut cycle as long as inflation slows steadily and the currency market remains stable. Rate setters said that easing needs to continue to be coordinated with their hryvnia exchange-rate liberalisation strategy.

“During the discussion, participants agreed that the NBU will press forward with the cycle of key policy rate reductions, provided that inflation slows further and the FX market retains its sustainability over the forecast horizon,” the central bank said.

Read more: Ukraine presses ahead with rate cuts as war-time inflation eases

Still, the bank “remains conservative considering that the balance of risks has partially worsened”, according to the statement.  NBU said.

Russia may be about to get a new friendly leader in Europe

When Slovakia’s longest-serving prime minister was forced out of office in 2018 following the biggest mass protests since the communist era, he grinned and vowed that he’d be back. Few, though, took him seriously.

Robert Fico saw his closest ally defect to form a new party, prosecutors seek to put him and his associates behind bars for alleged corruption and his Smer party collapsed to a record low in opinion polls. Yet reaction to the war in Ukraine has created a path back to power that would further test the European Union’s ability to remain united against Russian belligerence, even more so after Poland’s recent spat with Kyiv.

Slovaks will vote on 30 September in a tight election, and Fico has tapped into concerns over the fallout from the conflict. In a country of 5.4 million people who are the most pro-Russian in the region, he has vowed to end military aid to Ukraine, called Slovakia’s president an “American agent” and opposes Nato membership for its war-ravaged neighbour.

“Fico has no problem crossing red lines,” said Boris Zala, a Smer co-founder who now works on policy papers for the think tank Progressive Forum in Bratislava. “He will do anything to win more votes.”

A member of the 27-nation EU, the euro region and Nato, Slovakia matters politically. It’s also sandwiched between Hungary, run by disruptor-in-chief Viktor Orban, and Poland, whose ruling nationalist Law & Justice Party is aiming to win a third consecutive election on 15 October.

The three countries have angered Kyiv by pushing to extend a ban on Ukrainian grain imports to protect their farmers, something Fico said last week he would continue if he were to win power.  Polish Prime Minister Mateusz Morawiecki had escalated the quarrel by saying his country halted arms shipments to Ukraine, before government officials walked back the remarks.

Slovakia has generally remained steadfast in its support for Ukraine since Russia’s invasion in February 2022, even as successive surveys showed that more than half of Slovaks blame the West or Ukraine for the war.

The country still sent weapons eastward, accommodated more than 100,000 Ukrainian refugees and backed all sanctions on Russia even though the move had a direct effect on its energy supplies.

The return of Fico (59) could quickly change that, bringing into question Slovakia’s cooperation with Nato given his fierce criticism of the alliance and the US. It would also boost the influence of Orban, who has opposed sanctions and weapons deliveries.

Victory isn’t a done deal. Smer has about 20% support in opinion polls, giving it an advantage of three percentage points over its main rival, the Progressive Slovakia party led by Michal Simecka. That lead — in a fragmented political landscape where smaller parties will ultimately play kingmaker — has gradually narrowed from five points in March. DM

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