Ukraine-Russia News
LAST UPDATE: June 7, 2025
Russian central bank delivers surprise rate cut, first since 2022
On June 6, 2025, Russia’s central bank unexpectedly reduced its key interest rate by one percentage point to 20%, marking its first cut since September 2022.
Insight
The rate cut reflects the central bank’s response to slowing inflation and a cooling economy. Governor Elvira Nabiullina emphasized that future rate decisions will depend on ongoing economic data and market developments. Despite the cut, the bank maintains a cautious stance due to lingering inflationary risks, particularly rising food prices. The move aims to balance controlling inflation with preventing excessive economic contraction.
Russia’s Nabiullina on central bank rate cut, inflation and rouble
Governor Elvira Nabiullina discussed the rationale behind the recent interest rate cut, noting that inflation is at the lower end of expectations and the rouble has strengthened due to tight monetary policy.
Insight
Nabiullina highlighted that the decision to cut the rate was influenced by a combination of factors, including slowing inflation and the need to support economic growth. She emphasized the central bank’s independence in decision-making, despite considering expert and governmental input. The bank aims to ensure a smooth economic growth trajectory without triggering new inflation, even if global trade tensions escalate.
Zelenskiy May Meet Trump on Sidelines of G-7 Summit, Aide Says
Ukrainian President Volodymyr Zelenskiy may meet U.S. President Donald Trump on the sidelines of the upcoming G-7 summit in Canada, according to Zelenskiy’s chief of staff, Andriy Yermak.
Insight
The potential meeting signifies ongoing diplomatic efforts to strengthen U.S.-Ukraine relations amid the ongoing conflict with Russia. Discussions are expected to focus on continued U.S. support for Ukraine, including military aid and economic assistance. The meeting could also address broader geopolitical concerns and the importance of transatlantic unity in the face of Russian aggression.
EU reimposes pre-war agri duties on Ukraine, seeks compromise in new deal
The European Union has reinstated pre-war duties and quotas on Ukrainian agricultural products after the expiration of wartime exemptions, aiming to balance support for Ukraine with concerns from European farmers.
Insight
The reinstatement of duties reflects the EU’s attempt to address domestic agricultural concerns while continuing to support Ukraine’s economy. Negotiations are underway to establish new trade quotas that are more generous than pre-war levels but more restrictive than wartime exemptions. The outcome of these talks will significantly impact Ukraine’s agricultural exports and the EU’s internal market dynamics.
Germany’s Merz says some US lawmakers have ‘no idea’ of scale of Russia’s rearmament
German Chancellor Friedrich Merz criticized some U.S. lawmakers for underestimating the scale of Russia’s military buildup, emphasizing the need for continued U.S. support for NATO and Ukraine.
Insight
Merz’s comments highlight concerns about differing perceptions of the Russian threat between European and U.S. policymakers. He emphasized that Russia has intensified its defense industry operations since its 2022 invasion of Ukraine, including ramping up arms production and forming military agreements with North Korea and Iran. These developments have raised alarms among European officials regarding potential threats to NATO territory. Merz’s advocacy for increased defense spending and transatlantic cooperation underscores the importance of unity in addressing shared security challenges.
Russia says its strike against Kyiv and other centres was a response to Ukrainian ‘terrorist acts’
On June 6, 2025, Russia launched a large-scale overnight strike targeting military and military-linked facilities across Ukraine, including Kyiv, claiming it was in retaliation for recent “terrorist acts” attributed to Ukraine.
Insight
The Russian Defense Ministry stated that the strikes were a response to a deadly bombing of a railway bridge in western Russia, which resulted in seven deaths and 155 injuries. Ukraine has not claimed responsibility for the bombing but reportedly damaged Russian nuclear-capable bombers at airfields over the same weekend. The Kremlin emphasized that all Russian military actions are responses to what they describe as terrorism by Kyiv. The Russian military claimed the strike employed long-range precision weapons and successfully hit key Ukrainian military production and repair facilities, training centers, and equipment depots. Additionally, Russia claimed control over the eastern Ukrainian settlement of Fedorivka, though this battlefield development remains unverified by independent sources.
Ukraine’s foreign currency reserves slip to $44.5 bln as of June 1, c. bank says
Ukraine’s foreign currency reserves decreased to $44.5 billion as of June 1, 2025, down from $45.7 billion the previous month, according to the central bank.
Insight
The decline in Ukraine’s reserves reflects ongoing economic challenges amid the prolonged conflict with Russia. The reduction may impact the country’s ability to stabilize its currency and meet external obligations. This situation underscores the importance of continued international financial support and effective domestic economic policies to maintain macroeconomic stability.
