Ukraine latest: Kyiv may soon resume regular rate decisions

A top Kremlin official said Russia is intent on taking all of the Donetsk and Luhansk regions of Ukraine, even as the campaign on the ground there is struggling after heavy losses.

Ukraine’s central bank may return to regular monetary policy decisions in June or July. The Group of Seven will agree to more than $19 billion in short-term financial aid for Ukraine, Germany’s finance minister said. The bloc’s finance chiefs and central bankers wrap up a meeting near Bonn on Friday.

Russia’s war is shadowing US President Joe Biden as he heads to South Korea and Japan. Biden on Thursday welcomed congressional passage of $40 billion in aid for Kyiv and announced a new package of weapons he said would be sent “directly to the front lines.”

A top Kremlin official said Russia is intent on taking all of the Donetsk and Luhansk regions of Ukraine, even as the campaign on the ground there is struggling after heavy losses.

Key Developments

  • Scholz’s Push to Make Germany a Real Military Force Hits Trouble
  • Senate Approves $40 Billion for Ukraine Aid, Sends to Biden
  • Yellen Says Secondary Sanctions on Russia Oil Discussed at G-7
  • Biden Backs Finland, Sweden NATO Bids as Turkey Dangles Keys
  • Firm With a Royal Sheen Helped Abramovich Spread His Wealth
  • Bacon, Chicken and Beef Won’t Get Cheaper Anytime Soon

All times CET:

Ukraine May Revive Rate Decisions as Soon as June (9:37 a.m.) 

Ukraine’s central bank is considering a return to regular monetary policy decisions in June or July in a sign the country is getting its financial system back on its feet after the initial shock from Russia’s war.

Rate decisions were suspended in the aftermath of Russia’s February invasion, which devastated Ukraine’s economy and spurred inflation.

A first decision looks more likely in July, said three people with knowledge of discussions at the central bank said. According to the bank’s pre-war schedule, rate meetings were to be held on June 2 and July 21.

Germany Says G-7 Agree to $19 Billion in Ukraine Aid (9:09 a.m.)

The Group of Seven industrialized nations will agree on more than 18 billion euros ($19 billion) in short-term financial aid for Ukraine at a meeting in Bonn that ends Friday, German Finance Minister Christian Lindner told Bloomberg Television.

The cash includes $7.5 billion committed by the US and money from the European Union, Lindner said, adding that Ukraine’s funding problems would be solved “for the foreseeable future.”

Stable Flows From Russia Drive Down Gas Prices (8:30 a.m.)

Natural gas prices in Europe declined again on Friday as rising stockpiles and stable Russian supplies counter some risk on Russian new payment rules. Benchmark front-month Dutch futures dropped as much as 3.3% to 88 euros per megawatt-hour, on pace for a 9.1% weekly loss.

Europe’s gas inventories are rebounding to near their seasonal levels as companies prepare for any potential disruption from Russia, the continent’s top supplier. Russian gas shipments to Europe on Friday are expected to be stable.

Russia’s Mariupol Forces Will Need Significant Refurbishment, UK Says (8:11 a.m.) 

Russian forces involved in the long campaign to capture the Azovstal steel plant in Mariupol are likely to be sent next to the Donbas, the UK military said on Twitter.

“Staunch Ukrainian resistance in Mariupol since the start of the war means Russian forces in the area must be re-equipped and refurbished before they can be redeployed effectively,” the UK said. “This can be a lengthy process when done thoroughly.”

Analysts at the US-based Institute for the Study of War said Moscow’s forces in Ukraine “are continuing to suffer shortages of reserve manpower, causing the Russian military command to consolidate depleted battalion tactical groups.”

Oligarchs Avoid Spanish Party Isles as Yachts Risk Seizure (7:59 a.m.)

Russian tycoons are skipping the Balearic Sea — best known for the resort islands of Majorca and Ibiza — to avoid having their megayachts seized.

Just one vessel tied to a sanctioned Russian tycoon was spotted in the region this spring after Russia invaded Ukraine and sanctions were imposed, according to an analysis for Bloomberg News by Spire Global Inc., which provides maritime intelligence data.

Wildfires Near Chernobyl Pose No Radioactive Threat, Ukraine Says (5:47 a.m.)

Wildfires near the Chernobyl nuclear power plant don’t pose a radioactive threat, Ukraine officials told the International Atomic Energy Agency, its director general Rafael Mariano Grossi said in a statement. The agency agreed with Ukraine’s assessment.

Last week, Ukraine reestablished full remote transmission of safeguards data from Chernobyl, after two months of interruption caused by Russia’s invasion.

War, Drought and Disease Hammer Livestock Farmers (6 a.m) 

Crop and energy costs surging in the wake of Russia’s war in Ukraine have compounded the woes for livestock producers, even as they struggle with everything from droughts curbing grazing lands to bird-flu outbreaks from North America to Europe that wiped out millions of poultry.

Hit from all sides, many farmers are selling livestock or breeding fewer, showing output will be capped in the longer-term.

UK, Denmark Consumer Confidence Plummets (2 a.m.)

UK consumer confidence fell to its lowest level in at least 48 years with a surge in the cost of living, among the downstream effects of war in Ukraine, leaving people more gloomy than at the depths of the 1970s energy crisis and during the recession more than a decade ago.

Denmark’s consumer confidence fell to an all-time low in May amid energy-driven inflation and uncertainty about the war in Ukraine.

US, UN Mull Grain Export Plan, WSJ Says (1:26 a.m.)

The US and United Nations Secretary-General Antonio Guterres are reviewing plans for the possible export of Ukrainian grain by railway through Belarus to the Lithuanian port of Klaipeda, the Wall Street Journal reported, citing unidentified US officials. The US may offer a six-month sanctions break on Belarus’ potash fertiliser industry, the newspaper said.

Belarus’s main potash producer, which accounts for about a fifth of global supply, was hit with US sanctions last year to limit the financial benefits that President Alexander Lukashenko’s regime derives from exports.

Germany’s Scholz Urges Former Chancellor to Quit Russian Jobs (8:42 p.m.)

German Chancellor Olaf Scholz upped the pressure on predecessor Gerhard Schroeder to leave his lucrative jobs as chairman of both the state-owned Russian oil giant Rosneft PJSC and the shareholders’ committee of Nord Stream AG following Russia’s invasion of Ukraine.

Schroeder served as chancellor from 1998 to 2005, but the former leader has become an embarrassment to his party for refusing to cut his close ties to Russian President Vladimir Putin and Moscow’s state-owned energy companies.

Biden Welcomes $40 Billion for Aid, Offers More Weapons (8:12 p.m.)

The Biden administration announced $100 million in military assistance to Ukraine including artillery, radar and other equipment ahead of the $40 billion Ukraine aid package sent to him by Congress on Thursday.

Biden said the package will “allow us to send even more weapons and ammunition to Ukraine, replenish our own stockpile and support US. troops stationed on NATO territory.” The Pentagon said the equipment will include 18 155MM howitzers, their carriers and three counter-artillery radars. Defense Department spokesman John Kirby said the artillery is proving “critical” equipment for Ukrainian forces. He said the $100 million exhausts existing “drawdown” authority from US stockpiles.

The latest shipments will bring the total amount of US military assistance provided to Ukraine since Russia’s invasion to $3.9 billion.

Senate Sends Biden $40 Billion Ukraine Aid Package (7:34 p.m.)

The US Senate passed a Ukraine aid package of more than $40 billion on a bipartisan 86 to 11 vote, sending the measure to Biden for his signature.

The legislation is significantly larger than the $33 billion package Biden requested last month but received overwhelming support. Although some Republicans in both the House and Senate objected to adding to the deficit by sending more money abroad or criticized Biden’s strategy, most backed the Democratic president’s call to rush more aid to Ukraine.

NATO’s Brass Welcome Sweden and Finland Joining (7:31 p.m.)

NATO’s top military brass welcomed Sweden’s and Finland’s applications to join, saying the aspiring members would boost the alliance’s security due to their land mass, modern capabilities and already high level of integration with allies.

Asked how challenging it would be for the alliance to defend the two countries’ large geographic areas, archipelagos and forests, NATO’s supreme allied commander for Europe, US General Tod Wolters, said “we look at those attributes as tremendous opportunities to improve our ability to comprehensively deter.”

Russian Forces to Take All of Donetsk, Luhansk, Kremlin Says (6:18 p.m.)

Russian forces will take Ukrainian territory all the way to the “historical borders” of the Donetsk and Luhansk regions and “demilitarize” nearby areas, a top Kremlin official said, reconfirming Moscow’s ambitious war aims there even as its troops struggle to advance against heavy Ukrainian resistance.

Sergei Kiriyenko, first deputy chief of the presidential staff, didn’t indicate a time frame for the takeovers in a televised meeting with youth groups. Occupation authorities in the territories held by Russia have suggested they’re likely to seek annexation by Moscow.

The Kremlin’s public statements on its aims have shifted over the months since the Feb. 24 invasion. President Vladimir Putin said then that Russia didn’t plan to occupy Ukraine. Since then officials have laid out plans to permanently hold at least the territories occupied by Russian forces in the east and south. Ukraine has refused to cede any land in now-stalled peace talks.

Russia Military Chief Speaks by Phone to US General: Interfax (5:21 p.m.)

Russia’s top military officer, Valery Gerasimov, discussed the war in Ukraine by phone with US General Mark Milley, Interfax reported, in the first known direct contact between the top commanders since Moscow sent troops into Ukraine on Feb. 24.

The Defense Ministry statement cited by Interfax provided no details of the conversation, other than to say that it was placed at the initiative of the US.

Last week, US Defense Secretary Lloyd Austin called for an immediate cease-fire in his first discussion since the invasion with his Russian counterpart, Sergei Shoigu, the Pentagon said May 13. Gerasimov, seen as one of the most powerful advocates of the war in the Russian leadership, hasn’t been seen in public recently.

© 2022 Bloomberg

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