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Sunday, 27 February 2022

Russia steps up assault on Kyiv overnight — faces sanctions on its central bank and being cut off from SWIFT global banking network

Russia stepped up its assault on Kyiv overnight as the war in Ukraine entered its fourth day. Here’s what you need to know this morning:

“Huge explosions” were reported near Kyiv in the early hours of this morning as Russian troops advance on the Ukrainian capital, the Associated Press reports. Fighting continues across the country, though it’s unclear just how much of Ukraine is now held by Russian forces.

The human toll: More than 200 Ukrainians have been killed and another 1k injured — and some 150k Ukrainians have fled the country so far, the UN High Commissioner for Refugees said yesterday on Twitter. Around half of them have fled to neighboring Poland, which along with Romania effectively threw open its borders. There are no casualty figures available for Russian troops.

The financial toll: Russian bn’aires lost USD 39 bn in wealth in the first day of the war as Moscow’s benchmark stock market plunged more than 33% — the fifth-worst one-day plunge in the history of global markets, Bloomberg says.

THE WEST IS GETTING SERIOUS with arms and actions. In a major policy shift, Germany has agreed to supply Kyiv with weapons, going against historical restraint from exporting arms to war zones, Bloomberg reports. The US has also pledged an additional USD 350 mn in assistance to Ukraine as its army attempts to hold the capital.

Some Russian banks are about to be cut off from SWIFT… The US, Canada, UK, Germany, France, Italy and the European Commission announced in a joint statement that they would remove “select” Russian banks from the SWIFT global payments system. That would make it a whole lot more difficult for Russian companies to do business abroad, the Guardian and Wall Street Journal report. Tns of USD move through the SWIFT messaging system daily.

…and impose sanctions on Russia’s central bank. This is the big one. Sanctions on Russia’s central bank would be designed to make it difficult for Vladimir Putin to shore up the economy by deploying cash from Russia’s more than USD 600 bn stockpile of reserves. US officials said the measures are designed to “send the ruble into ‘freefall’ and promote soaring inflation in the Russian economy,” the Associated Press reports.

Putin himself and his Foreign Minister, Sergey Lavrov, have both been hit with personal sanctions by countries including Canada and Australia — and the US State Department has signaled that Washington may follow suit.

But don’t expect NATO to send troops or impose a no-fly zone — with pundits pointing out that a no-fly zone would, by definition, find Western countries in direct conflict with Russia.

There’s plenty of mumbling in Western capitals about finding ways to arm and support Ukrainian rebels for the long term if, as many expect, Ukraine’s army is ultimately overcome by the invading force.

ISOLATING RUSSIA- Russia finds itself increasingly isolated on the world stage. A total of 11 countries voted in favor of a UN Security Council resolution condemning Russia's invasion of Ukraine. Russia, as expected, used its veto power to block the resolution. Notably, the UAE (which cooperates with Russia on oil policy, among other things), China, and India abstained from voting.

China may be slowly distancing itself from Russia, with Foreign Minister Wang Yi on Friday calling on all sides to exercise restraint, shortly after President Xi Jinping called Putin to urge him to seek a diplomatic resolution.

DIGITAL WARFARE- Official Russian government websites became inaccessible yesterday due to reported cyberattacks, reports the Wall Street Journal.

And Big Tech has chosen sides: Youtube has restricted access to Russia’s state-controlled RT and other channels in Ukraine in response to a request from the Ukrainian government, the Wall Street Journal reported. In line with US sanctions, the Google-owned platform will be pausing several Russian channels’ ability to monetize their Youtube videos. Facebook joined YouTube in blocking Russian state-backed media from advertising on the site, while Twitter — which already banned such ads in 2019 — put a temporary pause on all advertising through its platform in Russia and Ukraine, NPR reports.

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