Key facts
- Ukraine's drone strikes are targeting Russian refineries, warehouses, and ships.
- Russia's Ministry of Finance suspended bond sales due to insufficient buyer interest at current yields.
- The Russian central bank's key interest rate is 14.25% to manage inflation.
- The benchmark Russian stock index has declined 30% in the past two months.
- Attacks on Wildberries fulfillment centers have impacted e-commerce and small businesses.
Ukraine's escalating drone attacks on Russia's economic infrastructure, including refineries and logistics hubs, are intensifying pressure on the Russian economy and financial markets. The Ministry of Finance has suspended bond sales as banks demand higher yields, reflecting a standoff over financing the ongoing war.
Government bond yields are currently ranging between 13% and 17%, while the central bank's key rate stands at 14.25% to combat inflation. This situation arises as Russia's budget deficit widens sharply, with military spending accounting for nearly half of government expenditures in the second quarter, according to estimates.
The benchmark Russian stock index, heavily influenced by the oil and gas sector, has fallen 30% in the last two months. Ukraine's ability to strike economic targets as far away as Siberia has disrupted fuel supplies and hampered exports of grain. Recent attacks on Wildberries, Russia's largest e-commerce platform, have destroyed hundreds of millions of dollars worth of goods, impacting thousands of small businesses that rely on the marketplace.
Ukrainian drone forces commander Robert Brovdi stated that the attacks aim to shatter the illusion of a peaceful life for citizens of the aggressor state. Ukraine considers Wildberries a legitimate target due to its listing of dual-use items and Russia's targeting of similar logistics centers in Ukraine.