ISA Ukraine Conflict Update - 2nd of March 2022

Daily Summary

Russian forces found themselves struggling to maintain their momentum along many areas of the frontlines in the war in Ukraine, particularly around the key cities of Kyiv and Kharkiv. This loss of momentum was the result of both staunch Ukrainian defenses and difficulties experienced by the Russian military in maintaining supply lines.

Russia continued to assemble large forces to the north of Kiev, with a massive column of Russian military vehicles stretching from the north of Kiev back into Russia. This suggests that the Russians are preparing to besiege the Ukrainian capital after their efforts to seize it rapidly at the beginning of the invasion failed.

Meanwhile, Russian forces have stepped up their missile and rocket attacks on targets inside Kiev, Kharkiv and other Ukrainian cities and this has led to an increase in civilian casualties in these areas. In particular, Kharkiv has come under fire, with Russian warplanes making their first significant appearance of the war so far along that front.

On the economic front, sanctions against Russia have already had a massive impact on that country’s economy, with the Russian ruble losing much of its value since these sanctions were imposed. This forced Russia’s central bank to raise interest rates from 9.5% to 20% in a bid to prop up the ruble. 

Key Developments

The Refugee Crisis: More than 800,000 people have already fled Ukraine since the Russian invasion of that country began last week, and this number is expected to rise sharply. More than 450,000 of these refugees have fled to Poland, while Hungary had received nearly 120,000.

The Coming Days: China signaled that it is willing to help secure an end to the conflict in Ukraine. This is the latest signal from China that it is not comfortable with Russia’s decision to invade Ukraine. This could a longer-term threat to the Russian economy given its dependence upon China.