Russia-Ukraine Update: Russia’s Military Callback from Kyiv is Tactical; Deep Recession Concern Mounts, says IMF

Russia announced on Tuesday it will significantly call back its military operations near Ukraine’s capital of Kyiv and other city of Chernihiv, underscoring a possible deal in view of the latest war halt talks between the two countries.

After talks between Russia-Ukraine in Istanbul, Turkey, Russian Deputy Defense Minister Alexander Fomin said Moscow has decided to “fundamentally … cut back military activity in the direction of Kyiv and Chernihiv” to “increase mutual trust and create conditions for further negotiations”.

However, Russia did not immediately laid plans on what that reduction of military operations would mean in practical terms.

The negotiations are expected to resume on Wednesday.

The move was met with criticism by U.S. and others. US President Joe Biden, asked whether the Russian announcement was a sign of progress in the talks or an attempt by Moscow to buy time to continue its assault, said, “We’ll see. I don’t read anything into it until I see what their actions are.”

John Kirby – Pentagon spokesman said, the threat to Kyiv isn’t over despite Russian talk of pulling back, because Putin’s goals continue to stretch well beyond the eastern Donbas region.

“Nobody should be fooling ourselves by the Kremlin’s now-recent claim that it will suddenly just reduce military attacks near Kyiv or any reports that it is going to withdraw all its forces,” Kirby said.

It’s “a repositioning, not a real withdrawal” from positions around the Ukrainian capital.

The progress in negotiations triggered shape decline in crude oil prices, however due to supply tightness in the market crude oil climbed in Asian trading.

Ukraine said it’s willing to discuss the status of occupied Crimea, while Russia indicated a meeting was possible between the two countries’ presidents, Vladimir Putin and Volodymyr Zelenskiy.

Russian Foreign Minister Sergei Lavrov touched down in China for the first high-level.Lavrov’s plane landed in the eastern province of Anhui, Russia’s Foreign Ministry said on Twitter. He’s set to participate in a meeting of foreign ministers of countries bordering Afghanistan, Interfax reported last week.
Meanwhile, the U.S. government is considering to provide Ukraine with an additional $500 million in aid and is pushing European allies to match the contribution, according to Bloomberg citing people familiar with recent discussions.

Markets and Economy:

Russia Offers to Buy Back 2022 Eurobonds in Rubles.

Russia’s Finance Ministry offered to buy back $2 billion in dollar-denominated Eurobonds that come due next week, but says it will pay for the repurchased notes in rubles.

The offer comes as Russia has to date avoided a default since the war started, even as credit-rating companies warn one could be imminent. Local capital controls would mean that any investors who receive rubles for their obligations would not be able to convert them into dollars.

Kristalina Georgieva, the managing director of the International Monetary Fund, told a forum in Dubai that, Russia is Heading for Deep Recession.

The IMF has previously said Russia will default on its debt obligations as the nation suffers a deep recession caused by sanctions in response to its invasion.