Russia Ukraine news latest: Putin scrambles to convene currency control meeting over economic fears

Vladimir Putin was set to discuss currency controls with Russian policymakers yesterday as the ruble continued to depreciate despite an extraordinary 3.5 percentage point hike in interest rates, in a sign that Moscow’s full-blown war is weighing on its own economy.

The Russian president was expected to hear proposals from the Treasury Ministry that would require exporters to convert part of the country’s foreign earnings into rubles, said two people who were aware of the developments Financial Times.

Proposals by Russia’s Treasury Ministry would require exporters to sell up to 80 percent of their foreign exchange earnings within 90 days of delivery, the newspapers reported. A ban was also sought on companies that refused to receive government subsidies.

This is the first such proposal for tighter currency controls being discussed in the Kremlin since the full-scale invasion of Ukraine began in February last year.

In recent months, the Russian ruble has become one of the worst-performing currencies in the world, and the country’s central bank has stepped in to try to stem the decline.

The decline in the ruble is “not very welcome” for the Kremlin, said Janis Kluge, an expert on the Russian economy at the German Institute for International Politics and Security.

Although it wasn’t a full-blown crisis, “we’re the closest we’ve ever been to a real economic problem since the beginning of the war,” he said.

The chaos at the start of the sanctions was far worse, but since then the ruble’s decline is “the first time that something doesn’t seem so much under control,” he said.

The United States has slammed Russia’s ongoing attacks on Ukraine’s grain infrastructure and urged Moscow to return to the grain deal immediately.

Russian President Vladimir Putin doesn’t care about global food security, State Department deputy spokesman Vedant Patel told reporters after Ukraine earlier yesterday said Russia had attacked its grain storage facilities overnight.

A spokesman for Ukraine’s Air Force said Ukraine would not be able to defend itself against the ongoing Russian invasion with F-16 fighter jets this fall and winter.

“It is already clear that we cannot defend Ukraine with F-16 fighter jets this fall and winter,” spokesman Yuriy Ihnat said at a joint fundraiser for Ukrainian broadcasters.

“We had high hopes for this plane to become part of air defense and to protect us from Russia’s missile and drone terrorism,” said Mr. Ihnat, confirming that Kiev is aware of the delays in delivering the fighter jets, according to which Allied forces have sought it from its west.

Earlier in August, Mr. Zelenskyy announced the training of Ukrainian pilots in F-16 fighter jets for this month, stating that “the delivery and combat use of the F-16 by our pilots should take place as soon as possible”.

The delivery of top-of-the-line fighter jets to the war-torn country would be a signal that the Russian invasion would end in defeat, Zelenskyy had said. However, a former NATO commander said that promised Western support with F-16s for Ukrainian pilots has been slowed as allies of the war-affected nations did not want to provoke Russia and set off a direct confrontation between nuclear powers.

The United States on Wednesday condemned Russia’s ongoing attacks on Ukraine’s grain infrastructure and said it was working with partners to find alternative options to ensure Ukrainian grain exports.

“The United States … urges Russia to immediately return to the Black Sea Grain Initiative,” Deputy State Department Spokesman Vedant Patel said in a briefing, referring to a pact that would allow Ukrainian grain exports across the Black Sea had made possible.

Russia withdrew from the agreement on July 17.

Patel said the US was “possibly looking at ways and corridors for how we can continue to get grain where it needs to go,” without giving specifics. He added that Washington has seen no sign of the Russians wanting to return to the deal.

Poland is sending thousands of troops to the border with Belarus, calling it a deterrent measure as tensions between the two neighbors mount.

Those tensions between Poland – a NATO and EU country – and Belarus, Russia’s ally in the war against Ukraine, have been heating up on the border in recent months.

Vladimir Putin has accused Western countries of “pouring fuel on the fire” by funding the conflict in Ukraine.

Speaking to participants at an international security forum, the Russian President blamed others for the ongoing invasion of Russia.

Putin said countries that were “pumping billions of dollars into the neo-Nazi regime” would “inflame the conflict even more in order to draw other states into the conflict.”

It comes as experts said The Independent that Western pressure on Ukraine’s counteroffensive to achieve a “Hollywood”-like breakthrough against Russian forces is “unrealistic”.

Russian mines wash up on busy tourist beaches on the Black Sea, often detonating and sometimes even killing vacationers.

It was only on Monday that a Russian mine exploded in the Romanian Black Sea resort of Costinesti, but according to local reports it caused no injuries or damage. In the meantime, another mine has been discovered in the water there.

My colleague Tara Cobham reports:

Warsaw sends 10,000 soldiers to the border with Belarus, the mercenary group sets up camp and recruitment posters announce their presence. Kim Sengupta reports on the Suwalki Gap in Poland, a key point for NATO’s defense of Europe, while provocations from Russia and Belarus also mount.

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Sweden’s government said on Wednesday it had ordered the National Trade Office to investigate whether a surge in exports to countries bordering Russia was prompted by attempts to circumvent sanctions imposed over the war in Ukraine.

“The increase (in exports) has raised suspicions that sanctions are not being fully complied with,” Sweden’s foreign ministry said in a statement.

The head of the country’s security service confirmed Ukraine’s involvement in the attack on the vital bridge connecting Russia and Crimea and warned Moscow that similar attacks would follow.