Wednesday, May 18

Ukraine Update: Russian Land-Corridor Ambitions Still Thwarted


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Bloomberg News

(Bloomberg) —

Russia continues press a land assault in the Donetsk region while attempting to complete its capture of Mariupol in the south, which has been under a brutal siege for a month. Reaction continues to pour in after Russia’s bombing on Friday of a railway station that killed dozens of people and injured hundreds more.

The European Union and the UK announced sanctions against the daughters of Russian President Vladimir Putin. European Commission President Ursula von der Leyen met President Volodymyr Zelenskiy in Kyiv and promised more sanctions on Russia and financial aid for Ukraine. The UK and Germany vowed to send more weapons. Austria’s chancellor will visit Kyiv on Saturday.

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The International Monetary Fund plans a new account to provide support to Ukraine’s economy, through which Canada has proposed disbursing C$1 billion ($795 million).

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

Dozens Killed as Russia Strikes Ukraine Rail Evacuation HubNations Eye Modern Arms for Ukraine as Soviet-Era Stocks DwindleWar-Crimes Justice Grinds Slowly Amid Fury Over Ukraine KillingsRussia Surprises With Jumbo Rate Cut in Pivot to Protect EconomyIMF Creates New Account to Help Ukraine as Canada Pledges Funds

All times CET:

Russian Land Corridor Hopes Still Thwarted, UK Says (7:10 am)

Russian ambitions to establish a land corridor between Crimea and the Donbas region continue to be thwarted by Ukrainian resistance, the UK defense ministry said.

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Operations remain focused on the Donbas region, Mariupol and Mykolaiv, abetted by cruise missile launches into Ukraine by Russian naval forces. That includes strikes toward the Odessa region launched from the Crimean peninsula, Ukraine’s military said.

Russia continues “storming actions,” focusing on taking control of towns such as Nyzhnye, Popasna, Rubizhne and Novobakhmutivka, and installing complete control over Mariupol, which has been under siege for a month, Ukraine said.

Nations Eye Modern Arms for Ukraine (6:00 am)

Some supporters of Ukraine are ready to start helping it shift from Soviet-era weapons to more modern NATO-style equipment in the conflict with Russia, given the prospect the war drags on for months or even years.

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Countries have largely held back on supplying state-of-the-art weaponry to avoid having to train Ukrainian forces to use it. But NATO’s eastern states risk running out of Soviet-produced equipment at some point. Some allies may start training Ukrainian troops outside the country to be able to maintain and use more sophisticated weapons.

Russia Foreign Currency Rating Cut to SD by S&P (3:03 am)

S&P cut Russia’s unsolicited long- and short-term foreign currency issuer credit ratings to Selective Default from CC/C.

“The foreign currency downgrade follows our understanding that the Russian government made coupon and principal payments on its US dollar-denominated 2022 and 2042 Eurobonds in rubles when those payments were due on April 4, 2022,” S&P said.

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IMF Creates New Account to Help Ukraine (12:15 am)

The International Monetary Fund is establishing a new account designed to give donor nations a secure way to provide support to stabilize Ukraine’s economy after Russia’s invasion.

The account would receive loan or grant resources from donors in either reserve currencies or special drawing rights, the IMF’s reserve asset, and disburse support into Ukraine’s account at the fund, the institution said.

Ukraine Corn, Wheat Exports Set to Plunge Further (10:57 pm)

Ukraine’s grain exports are set to decline further with sea routes blocked off after Russia’s invasion, according to the US Department of Agriculture.

The USDA cut its forecast for corn exports by 4.5 million tons and wheat exports by 1 million tons, in the latest update of its closely watched World Agricultural Supply and Demand Estimates. The shortfalls will likely exacerbate the risks of food crisis in countries that rely on Ukraine and Russia for imports.

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EU Formalizes Sanctions on Deripaska, Putin Daughters (9:07 pm)

The European Union announced sanctions against 217 individuals and 18 entities, including Russian President Vladimir Putin’s adult daughters and Oleg Deripaska, a Russian aluminum tycoon.

Deripaska, who has been under US sanctions since 2018, owns an industrial conglomerate that includes a major provider of military equipment to Russia.

Moscow Shuts Human Rights Watch, Amnesty Branches (8:27 pm)

The Russian offices of Human Rights Watch and Amnesty International were ordered to close, a move Amnesty’s secretary general vowed wouldn’t stop her organization’s work.

“The authorities are deeply mistaken if they believe that by closing down our office in Moscow they will stop our work documenting and exposing human rights violations,” Secretary General Agnes Callamard said in a statement. “We will redouble our efforts to expose Russia’s egregious human rights rights violations both at home and abroad.”

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Russian government officials didn’t immediately respond to questions about the closings. Both groups have been critical of Russia’s actions in Ukraine. Human Rights Watch on Thursday applauded the United Nations’ decision to suspend Russia from the Human Rights Council.

Von der Leyen Says Ukraine Belongs in ‘European Family’ (7:58 pm)

European Commission President Ursula von der Leyen met with Zelenskiy in Kyiv after seeing the devasation and bodies of war victims in Bucha and vowed more support — including “rolling sanctions” — from EU members against Moscow.

“I am here with you in Kyiv today to tell you that Europe is on your side,” she said, adding that the EU would accelerate the second half of a financial aid package with 600 million euros ($650 million). Von der Leyen also delivered a folder to Zelenskiy with a questionnaire she described as an “important step toward EU membership.”

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US Deploys Patriot Missile System to Slovakia (6:14 pm)

President Joe Biden announced the deployment of a Patriot missile defense system to Slovakia after the NATO member said it was sending one of its S-300 air-defense systems to Ukraine. “I have directed my administration to continue to spare no effort to identify and provide to the Ukrainian military the advanced weapons capabilities it needs,” Biden said.

Defense Secretary Lloyd Austin said the Patriot battery will be manned by US forces and should arrive in the coming days. The deployment length hasn’t been fixed, he said, adding that “we continue to consult with the Slovakian government about more permanent air defense solutions.”

Germany, UK to Supply Ukraine More Weapons (5:27 pm)

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Germany and Britain vowed to send Ukraine more weapons and work together to put pressure on Russian President Vladimir Putin, downplaying differences over imposing tougher sanctions on Moscow.

Prime Minister Boris Johnson said the UK would send a further 100 million pounds ($130 million) worth of military equipment. Among the items to be sent will be over 800 anti-tank missiles, Javelin anti-tank systems, Starstreak air defence systems and a range of helmets, armour and night-vision goggles.

Chancellor Olaf Scholz said Germany would continue deliveries to Kyiv, without specifying types or amounts.

Russia Delivers Surprise Rate Cut (11:02 am)

The Bank of Russia delivered a surprise cut in its key interest rate Friday, reversing some of the steep increase it made after the invasion of Ukraine as the ruble has recovered.

The central bank lowered the rate to 17% from 20% and said further cuts could be made at upcoming meetings if conditions permit.

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