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Ukraine Latest: Russian Missiles Hit; IMF Mulls $16 Billion Loan

(Bloomberg) -- Ukraine said Russia launched 55 cruise missiles, including at least two hypersonic weapons, in a new wave of attacks on Thursday that killed at least 11 people, according to emergency services.

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The barrage, which also included drones overnight, was unleashed after Ukrainian President Volodymyr Zelenskiy expressed hope that donations of advanced weaponry including aircraft and long-range missiles would follow a pledge by the US and Germany to supply Ukraine with battle tanks.

US President Joe Biden is considering a trip to Europe in February to coincide with the one-year mark of the Russian invasion, NBC reported. The International Monetary Fund is exploring a loan of as much as $16 billion to support Ukraine’s economy.

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

Key Developments

  • IMF Weighs Ukraine Aid Package Worth as Much as $16 Billion

  • What Tanks Ukraine Will Get and Why It Wants Them: QuickTake

  • US Sanctions Russia’s Wagner Group as Criminal Organization

  • Biden Says US Will Send Tanks to Ukraine in Broad Allied Effort

On the Ground

Russian missile and drone attacks killed 11 civilians, Oleksandr Khorunzhyi, a spokesman for Ukraine’s state emergency service, said on television. The General Staff said earlier on Facebook that Kremlin troops had carried out 37 air strikes and 10 missile attacks over the past day, hitting civilian infrastructure in the cities of Dnipro and Zaporizhzhia, among other targets. A move by Russia to engage in “limited spoiling attacks across most of the frontline,” including Vuhledar in the Donetsk region, is probably an attempt to “distract Ukrainian forces and set conditions to launch a decisive offensive operation” in the Luhansk region, the Institute for the Study of War said.

(All times CET)

IMF Weighs Ukraine Aid Package Worth Up to $16 Billion (8:05 p.m.)

The International Monetary Fund is exploring a loan for Ukraine worth as much as $16 billion to help cover the country’s needs and provide a catalyst for more international funding, according to people familiar with the matter.

The program hinges on conditions including endorsement from Group of Seven nations, and Ukraine’s donors and creditors ensuring the sustainability of the country’s debt, said the people. If approved, it would likely involve a disbursement of as much as $7 billion in the first year. There’s hope the plan will be agreed on by the end of March, with the first tranche coming as early as April.

Canada to Send at Least Four Tanks to Ukraine (7:20 p.m.)

Canada will send four of its Leopard 2 battle tanks to Ukraine, joining allies including the US and Germany. Defense Minister Anita Anand said the government may send more tanks in future, depending on talks with its NATO partners.

The four tanks are “combat-ready and will be deployed over the coming weeks,” Anand said. The initial donation will include spare parts, ammunition and an unspecified number of Canadian soldiers to help train Ukrainians on the equipment, she said.

Ukraine Says Number of Grain Vessels Falls (5:34 p.m.)

The average number of vessels carrying Ukrainian grain via the Bosporus has dropped to 2.5 per day, the slowest pace since the grain corridor initiative unblocked such exports via three Black Sea ports in July, the Ukrainian Agriculture Ministry said on its website.

Intentional delays by Russian inspectors have caused the slowdown, the ministry said. Outbound grain shipments have so far totaled 2.4 million tons in January , compared with more than 4 million tons in September and October.

US Sanctions Russia’s Wagner Group as Criminal Organization (4:30 p.m.)

The US Treasury designated Russia’s Wagner Group a transnational criminal organization in an effort to degrade Russia’s capacity to wage war against Ukraine.

Sanctions against Wagner “will further impede Putin’s ability to arm and equip his war machine,” Treasury Secretary Janet Yellen said in a statement.

US Sanctions Russia’s Wagner Group as Criminal Organization

EU Considers Capping Russian Diesel at $100 (3:40 p.m.)

The European Union is floating a plan to cap the price of premium Russian refined fuel exports like diesel at $100 per barrel, with a lower $45 cap for discounted products.

The bloc is set to ban imports of refined Russian products starting Feb. 5 as part of an effort to sanction Russia for its invasion of Ukraine.

EU Considers Capping Russian Diesel at $100 Ahead of Import Ban

Power Supply in Kyiv Stabilized, Emergency Cutoffs in South (3:11 p.m.)

An energy worker was killed and his colleagues injured during Thursday’s attack, Volodymyr Kudrytskyi, chief of national grid operator Ukrenergo, said on Facebook. Russia didn’t “reach its main goal of causing a collapse in the energy system,” he added.

Kyiv and the surrounding area returned to a regime of scheduled power cutoffs from emergency outages, DTEK Energy said. Energy workers managed to “stabilize the situation”, though it remains difficult, Ukraine’s largest private energy company said.

Emergency blackouts are still in place in the Odesa region, though power is restored for critical infrastructure in the city of Odesa, according to DTEK.

EU Sees Legal Grounds to Use Seized Russian Assets (1:42 p.m.)

European Union member states have been told the bloc has the legal authority to temporarily leverage at least €33.8 billion ($36.8 billion) of Russian central bank assets to help pay for the reconstruction of Ukraine.

The EU has been exploring options to use frozen Russian assets following Moscow’s invasion of Ukraine, but the proposal is controversial and discussions are at a very preliminary stage.

EU Sees Legal Grounds to Use Seized Russian Central Bank Assets

French Foreign Minister Visits Odesa (1:24 p.m.)

French Foreign Minister Catherine Colonna arrived in the Ukrainian port city of Odesa despite Russian attacks that caused power outages.

The United Nations’ cultural agency, UNESCO, on Wednesday added the historic center of Odesa to its World Heritage List, recognizing “the outstanding universal value of this site and the duty to all humanity to protect it.”

Ukraine Holds Rates as Central Bank Slashes Growth Outlook (1:01 p.m.)

Ukraine’s central bank held the key interest rate at 25% and reiterated its intention to keep it there at least until the second quarter of 2024.

Policy makers also published updated economic forecasts that cut the 2023 outlook for growth to 0.3%, from 4% previously. Inflation is now expected to moderate to 18.7% this year, before slowing to 6.7% in 2025.

Thursday’s Barrage Included Hypersonic, Cruise Missiles (12:37 p.m.)

Ukraine shot down 47 Russian cruise missiles out of 55 launched from jets and from ships in the Black Sea, said Valeriy Zaluzhnyi, commander-in-chief of Ukraine’s Armed Forces. Apart from the missiles that were shot down, three Kh-59 missiles “did not reach their targets,” Zaluzhnyi said on Telegram, without giving details. Thursday’s barrage included two Kinzhal hypersonic missiles, Ukrainian air defense said.

“Russia’s aim remains the same — psychological pressure on Ukrainians and ruining critical infrastructure,” Zaluzhnyi said. “But we won’t be broken.”

German Tanks Could Arrive in Late March (12 p.m.)

Defense Minister Boris Pistorius said the first of the Leopard 2 battle tanks the German government has promised Ukraine could be delivered at the end of March or at the start of April, earlier than the “within three months” he suggested when the decision to supply them was announced.

In a statement to reporters during a troop visit in eastern Germany, Pistorius pushed back against a suggestion that the decision to supply the tanks had come too late.

“It is not a decision just to order something on the Web or send something to anybody, it is a matter of war,” he said. “We made our decision and here we are, and I think everyone should be satisfied with that decision because we do what is necessary.”

German Tanks Decision ‘Nothing to Cheer About’ (10 a.m.)

German Vice Chancellor Robert Habeck said the decision to supply Ukraine with Leopard battle tanks was “necessary and urgent” but nothing to cheer about.

“We are paying an economic, macroeconomic and, in a certain sense, a social price, but not paying this price would be dramatically worse,” Habeck said in a statement to the lower house of parliament in Berlin.

“If we are not willing to pay this price, that is to support Ukraine with sanctions, with military equipment, with a transformation of energy infrastructure, then we will be guilty of letting Putin win this war on his terms, and that must not happen,” he added.

Russian Oil Exports to India May Hit New Highs (9:10 a.m.)

India’s oil processors are open to buying even more Russian crude if the price is right, said refinery executives, potentially providing a bigger outlet for Moscow almost a year after its invasion of Ukraine.

Read more: Russian Oil Exports to India May Hit New Highs as Interest Grows

Ukraine Wants More Slovak Howitzers (9:28 a.m.)

Kyiv is interested in ordering another 14 Zuzana 2 howitzers from Slovakia, the Slovak defense ministry confirmed for Bloomberg in a statement.

“We are expecting the signing of the agreement, I hope that we can agree,” Slovak Defense Minister Jaroslav Nad told Ukrainska Pravda on Wednesday.

Slovakia delivered eight Zuzana 2 howitzers to Ukraine in 2022. The new weaponry will be paid for by NATO allies Denmark, Norway, and Germany.

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