Ukraine 'grateful' as Western allies expel some Russian banks from global system

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KYIV (REUTERS) - Ukraine is grateful for the latest round of financial sanctions imposed on Russia by the United States and its allies, Prime Minister Denys Shmygal said in a Twitter post early on Sunday (Feb 27).  

"Thanks to our friends... for the commitment to remove several Russian banks from SWIFT" and for "the paralysis of the assets of the central bank of Russia", he said.

SWIFT, or the "Society for Worldwide Interbank Financial Telecommunication", is a secure messaging network that facilitates rapid cross-border payments, making it a crucial mechanism for international trade.

Ukraine's defiant President Volodymyr Zelensky earlier on Saturday said Ukrainian forces were repelling Russian troops advancing on Kyiv.

Reuters witnesses in Kyiv reported occasional blasts and gunfire in the city on Saturday evening, but it was not clear exactly where it was coming from. The capital and other cities have been pounded by Russian artillery and cruise missiles.

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As the fighting continued, the United States and its allies said they were imposing a new round of sanctions in response to Russian President Vladimir Putin's invasion of Ukraine, including expelling some Russian banks from the SWIFT payment system.

The move deals a blow to Russian trade and makes it harder for Russian companies to do business.

The sanctions, agreed with the United States, France, Canada, Italy, Great Britain and the European Commission, could limit Putin’s use of his more than US$630 billion (S$853 billion) in international reserves, which have been widely seen as insulating Russia from some economic harm.

The new measures will prevent Russia from "using its war chest", according to Ursula von der Leyen, president of the European Commission, the European Union’s executive. 

After initially shying away from such a move, the allies committed to "ensuring that selected Russian banks are removed from the SWIFT messaging system".

It marked an escalation of the West's punitive economic response. Putin launched what he called a special military operation before dawn on Thursday, ignoring Western warnings and saying the "neo-Nazis" ruling Ukraine threatened Russia's security.

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A US defence official said Ukraine's forces were putting up "very determined resistance" to the three-pronged Russian advance that has sent hundreds of thousands of Ukrainians fleeing westwards, clogging major highways and railway lines.

"As Russian forces unleash their assault on Kyiv and other Ukrainian cities, we are resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies," the Western allies said as they escalated their punitive response.  

"We will implement these measures within the coming days," according to a joint statement from the Western allies.  

Amid a barrage of cyberattacks blamed on Moscow, Ukrainian Vice-Prime Minister Mykhailo Fedorov said his government will create an "IT army" to fight back.

Kyiv already has quietly called on its hacker underground to help against Russian forces, Reuters exclusively reported.  

Mr Fedorov also called on Saturday on SpaceX billionaire Elon Musk to provide 
Ukraine with the company’s Starlink satellite broadband service. Musk responded on Twitter: "Starlink service is now active in Ukraine. More terminals en route."

Ukraine, a democratic nation of 44 million people, won independence from Moscow in 1991 after the fall of the Soviet Union and wants to join Nato and the EU, goals Russia opposes.

Putin has said he must eliminate what he calls a serious threat to his country from its smaller neighbour, accusing it of genocide against Russian-speakers in eastern Ukraine – something Kyiv and its Western allies reject as a lie.  

A Ukrainian presidential adviser said about 3,500 Russian soldiers had been killed or wounded. Western officials have also said intelligence showed Russia suffering higher casualties than expected and its advance slowing.

Russia has not released casualty figures and it was impossible to verify tolls or the precise picture on the ground.  

Britain said on Saturday that Russian forces have restricted access to a number of social media platforms in an attempt to conceal details about the situation in Ukraine from their own people.

“Russian forces are sustaining casualties and a number of Russian troops have been taken prisoner by Ukrainian forces,” the ministry of defence said in an intelligence update.

“They are suffering from logistical challenges and strong Ukrainian resistance.”

The US echoed this view

"We know that (Russian forces) have not made the progress that they wanted to make, particularly in the north. They have been frustrated by what they have seen is a very determined resistance," a US official said, without providing evidence.  

Kyiv’s mayor Vitali Klitschko said there was no major Russian military presence in the capital but that saboteur groups were active. Klitschko, a former world heavyweight boxing champion, later told Germany’s Bild tabloid the city was "nearly encircled".

Authorities have handed thousands of assault rifles to residents and told citizens to make petrol bombs.  

A damaged residential building following Russian missile strikes in Kyiv on Feb 26, 2022. PHOTO: BLOOMBERG

At least 198 Ukrainians, including three children, have been killed and 1,115 people wounded so far, Interfax quoted Ukraine’s Health Ministry as saying. Interfax later cited the regional administration in Donetsk, eastern Ukraine, saying 17 civilians had been killed and 73 wounded by Russian shelling.  

Moscow says it is taking care not to hit civilian sites.

UN refugee chief Filippo Grandi said more than 150,000 Ukrainian refugees have crossed into neighbouring countries - half to Poland and many to Hungary, Moldova and Romania.  Russia’s Defense Ministry said its forces had captured Melitopol, a city of 150,000 in southeastern Ukraine. Ukrainian officials did not comment and Britain cast doubt on the report.  

If confirmed, it would be the first significant population centre the Russians have seized.  

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Several European countries, including Russia’s Baltic neighbours Lithuania and Latvia, said they were closing their airspace to Russian airliners. Germany said it was preparing to follow suit.

The Kremlin said its troops were advancing again "in all directions" after Putin ordered a pause on Friday. Ukraine’s government said there had been no pause.

"We have withstood and are successfully repelling enemy attacks. The fighting goes on," Zelensky said in a video message from the streets of Kyiv posted on his social media.

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Russia's assault is the biggest on a European state since World War II and threatens to upend the continent's post-Cold War order.

The crisis has galvanised the Nato Western military alliance, which has announced a series of moves to reinforce its eastern flank. While Nato has said it will not deploy troops to Ukraine, a string of countries are sending military aid.  

US President Joe Biden approved the release of up to US$350 million worth of weapons from US stocks, while Germany, in a shift from its long-standing policy of not exporting weapons to war zones, said it would send anti-tank weapons and surface-to-air missiles.

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