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Suspected spies for Russia arrested in UK; Russia's central bank hikes rates to 12%

This was CNBC's blog tracking developments on the war in Ukraine on August 15, 2023. See here for the latest updates.

At least three people were killed and many more injured after Russia launched a large-scale overnight air attack on Ukraine's western region of Lviv and the northwestern region of Volyn.

Scores of residential buildings and a kindergarten were destroyed in what local media has reported as the largest air assault on the Lviv region, which borders Poland, since the start of the war.

Russia's central bank headquarters in Moscow.
Anadolu Agency | Anadolu Agency | Getty Images

Russia's central bank on Tuesday raised its key interest rate to 12% from 8.5%, the bank said in a statement on its website.

The bank called an extraordinary meeting for Tuesday amid pressure from Moscow to halt a rapid depreciation of the country's ruble currency.

In other news, in the U.K. three suspected spies for Russia were arrested and charged in a major national security investigation, the Metropolitan Policy confirmed Tuesday.

Russia releases video footage showing soldiers boarding cargo ship in Black Sea
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Russia releases video footage showing soldiers boarding cargo ship in Black Sea

Russia's Shoigu says Ukraine depleted, war showing weakness of Western weapons

Russian President Vladimir Putin (L) talks to Defence Minister Sergey Shoigu (R) during the annual Navy Day Parade on July 30, 2023, in Saint Petersburg, Russia.
Contributor | Getty Images

Russia's defense minister told officials on Tuesday that Ukraine's ability to fight had been "almost exhausted" and said the war had exposed vulnerabilities in Western weapons systems that Moscow would soon share.

The war has sown devastation across swathes of eastern and southern Ukraine, killed or injured hundreds of thousands and triggered the biggest rupture in Russia's ties with the West since the 1962 Cuban Missile Crisis.

Ukraine and the West have accused Russia of war crimes and cast Moscow's invasion as an imperial-style land grab. The Kremlin casts the conflict as an existential battle with a hostile West which it says wants to tear Russia apart.

Speaking to a security conference in Moscow attended by China's defense minister, Li Shangfu, Defence Minister Sergei Shoigu, 68, said the conflict had been a serious test for Russia.

"In the special military operation, the Russian army has debunked many myths about the superiority of Western military standards," Shoigu said in a rare public speech, according to a text supplied by his ministry.

"The preliminary results of combat operations show that Ukraine's military resources are almost exhausted," said Shoigu, one of President Vladimir Putin's most powerful allies. He did not give detailed evidence to back up either statement.

Shoigu also said he would share details about the weaknesses of Western weapons and that none were invulnerable.

"We have data on … the destruction of German tanks, American armored vehicles, British missiles and other weapons systems," he said. "We are ready to share our assessments ... with our partners."

— Reuters

Zelenskyy visits troops in the southern Zaporizhzhia region

Ukraine's President Volodymyr Zelenskyy visited troops in the southern region of Zaporizhzhia Tuesday, a day after a similar visit to military units in the east of the country.

"Today we continued our work and meetings with our defenders in the Melitopol direction. I paid a visit to the 3rd operational brigade named after Colonel Petro Bolbochan," a post on the president's Telegram account stated. 

A Ukrainian sapper uses a pineapple-shaped fragmentation grenade as he trains soldiers to counter Russian mines that litter Russia's built-up defense lines in the Zaporizhzhia region.
Scott Peterson | Getty Images News | Getty Images

"The brigade took part in combat missions in Donetsk and Luhansk regions, in defensive battles for Kharkiv, in the liberation of villages and towns near Kharkiv, and is currently conducting offensive operations in the Zaporizhzhia direction. We discussed the most problematic issues with the brigade commander," Zelenskyy commented.

The president used similar language Monday, alluding to problems and challenges being encountered by Ukraine's forces as they look to reclaim Russian-occupied territory in southern and eastern Ukraine.

— Holly Ellyatt

Ukraine to bolster defenses in regions bordering Russia and Belarus

Ukraine is to strengthen its defenses in northeastern regions that border Russia and Belarus by funding new fortifications and military infrastructure, Prime Minister Denys Shmyhal said on Tuesday.

"At the request of Kharkiv and Chernihiv ... we are allocating 911.5 million hryvnias ($24.7 million) for Kharkiv and 363 million ($9.8 million) for Chernihiv to build military engineering and fortification structures," Shmyhal said on Telegram, according to a translation by Reuters.

Chernihiv, which borders both Russia and its ally Belarus, was partially occupied when Russia invaded Ukraine in early 2022 but was later liberated, while a large part of Kharkiv in northeastern Ukraine was liberated last year, although it is nearer to intense fighting on the eastern frontline.

An external view shows hotel ‘Ukraine’ destroyed during an air strike, as Russia's attack on Ukraine continues, in central Chernihiv, Ukraine March 12, 2022.
Oleh Holovatenko | Reuters

The move to fortify northern areas comes as Ukraine continues to watch Belarus closely for any signs it will actively join Russian forces fighting in Ukraine.

Minsk has so far given logistical support to Russia, allowing part of its invasion to be launched from its territory, as well as sheltering Russian mercenary fighters following a failed mutiny.

– Holly Ellyatt

3 dead and 27 wounded during attacks on western Ukraine, official says

Men stand near a crater from a missile explosion in the yard of an apartment residential building on Kakhovska Street on August 15, 2023 in Lviv, Ukraine.
Stanislav Ivanov | Getty Images News | Getty Images

Russian shelling on eight Ukrainian regions overnight killed three and wounded 27 others, Ukrainian Internal Affairs Minister Ihor Klymenko said Tuesday.

Attacks on Lviv in western Ukraine wounded 15 people wounded, the official said on Telegram, updating the number of casualties from the latest attacks on western Ukraine, including the region of Volyn where three people died.

"22 objects of civil infrastructure were damaged, including 1 apartment building, 9 private houses, 1 medical and 1 educational institution," he added, stating that fires had broken out as a result of the shelling.

Investigative police teams were recording evidence of suspected Russian war crimes, he said.

Western Ukraine has not often been the target of Russian missiles but has experienced a number of attacks in recent days putting NATO countries neighboring the war-torn nation, such as Poland, on edge.

–Holly Ellyatt

Ukraine calls for stronger sanctions on Russia suppliers

A crater left by one of a series of missile attacks on Kyiv last year, caused by cruise missiles of the 3M-14E “Caliber”, Kh-101, Kh-55, Tornado type.
Global Images Ukraine | Getty Images News | Getty Images

A top Ukrainian official on Tuesday called for sanctions on manufacturers and suppliers of microchips to Russia, saying they are being used in missiles being launched against Ukrainian targets.

"Last night, the Russians fired at Ukraine, in particular, with Kh-101 missiles. These missiles were manufactured by the Russians this year. The Kh-101 missiles, which were released in April, have approximately 30 foreign chips," the head of the Ukrainian President's Office Andrii Yermak said on Telegram.

Western technologies found in Russian military equipment, analysis shows
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Western technologies found in Russian military equipment, analysis shows

"Restrictions have already been introduced, but sanctions need to be strengthened so that Russia cannot obtain critical components and manufacture missiles," he added.

— Holly Ellyatt

Russia says it stopped Ukrainian saboteurs from crossing its border

Russia's security forces said Tuesday that they had prevented a Ukrainian sabotage group from entering the border region of Bryansk.

Bryansk governor Alexander Bogomaz said Russian soldiers and security services stopped the group near the village of Kurkovichi, which is less than two miles (3.2km) from the border.

"There were no casualties. As a result of shelling from the side of the Armed Forces of Ukraine, one animal of the agricultural enterprise was killed, there are partial damages to industrial premises and a car," Bogomaz wrote on the Telegram messaging app, according to a Google translation.

CNBC was unable to independently verify the claims.

— Karen Gilchrist

Ukrainian presidential chief calls for Russian sports ban

Wreckage removal work continues at a sports center damaged in Russia's missile attack in Dnipro, Ukraine on August 15, 2023. 
Ercin Erturk | Anadolu Agency | Getty Images

The head of the office of the president of Ukraine on Tuesday called for all Russian athletes to be banned from participating in international competitions, after Russian strikes destroyed a sports facility in Dnipro.

Wreckage removal work continues at a sports center damaged in Russia's missile attack in Dnipro, Ukraine on August 15, 2023. 
Ercin Erturk | Anadolu Agency | Getty Images

The ban should also extent to participation under a neutral flag, Andriy Yermak wrote on the X social media platform, formerly known as Twitter.

Sweden preparing $314 million support package for Ukraine

A photo taken on May 6, 2023 shows CV90 combat vehicles during the Aurora 23 military exercise at the Rinkaby firing range outside Kristianstad, Sweden.
Johan Nilsson | Afp | Getty Images

Sweden is preparing a new military support package for Ukraine worth 3.4 billion krona ($313.5 million), Reuters reported Defense Minister Pal Jonson as saying Tuesday.

The package is set to include ammunition and spare parts for previously donated weapon systems, including CV-90 infantry fighting vehicles, Archer artillery systems and Leopard 2 tanks.

— Karen Gilchrist

Three suspected Russian spies arrested in the UK

Three suspected spies for Russia have been arrested and charged in the U.K. in a major national security investigation, the Metropolitan Police confirmed Tuesday.

The defendants, all Bulgarian nationals, were held in February and have been remanded in custody since. They were named by the BBC as Orlin Roussev, Biser Dzambazov, and Katrin Ivanova.

The trio were arrested under the Official Secrets Act by counter-terrorism detectives from the Metropolitan Police, which has national policing responsibility for espionage.

They are charged with possessing identity documents with "improper intention," and are alleged to have known they were fake.

The documents include passports, identity cards and other documents for the U.K., Bulgaria, France, Italy, Spain, Croatia, Slovenia, Greece, and the Czech Republic, the BBC said.

The are due to appear at the Old Bailey on an as yet unconfirmed future date.

— Karen Gilchrist

Russia fines Reddit for not deleting 'banned content'

POLAND - 2023/07/26: In this photo illustration a Reddit logo seen displayed on a smartphone. (Photo Illustration by Mateusz Slodkowski/SOPA Images/LightRocket via Getty Images)
Sopa Images | Lightrocket | Getty Images

A Moscow court on Tuesday fined social media site Reddit for the first time for not deleting "banned content" that it claimed contained fake news, state-owned news agency RIA reported.

RIA said the court had fined Reddit 2 million rubles ($20,436) for what it said was "fake" information about Russia's military presence in Ukraine.

Social media sites have been under pressure since last year when Moscow introduced a new law limiting coverage of what it calls its "special military operation" in Ukraine.

Reddit did not immediately respond to CNBC's request for comment.

— Karen Gilchrist

Russia's ruble dips after emergency rate hike

A Russian one rouble coin is pictured in front of a monitor showing St. Basil's Cathedral and a tower of Moscow's Kremlin in this illustration taken June 24, 2022. 
Maxim Shemetov | Reuters

The Russian ruble gave up early gains Tuesday shortly after the central bank announced an emergency 350-basis-point rate hike.

The decision to raise rates to 12% came a day after the ruble fell to a near 17-month-low, sliding past the psychologically important threshold of 100 to the U.S. dollar.

The ruble firmed on the central bank's announcement Tuesday before falling 0.2% to settle around 97.82 by 11:15 a.m. Moscow time.

— Karen Gilchrist

Russia's central bank raises rates to 12% from 8.5%

A woman walks past the Russian Central Bank headquarters in downtown Moscow on July 21, 2023. 
Alexander Nemenov | AFP | Getty Images

Russia's central bank on Tuesday raised its key interest rate to 12% from 8.5%, the bank said in a statement on its website.

The bank called an extraordinary meeting for Tuesday amid pressure from Moscow to halt a rapid depreciation of the country's ruble currency.

"Inflationary pressure is building up," the bank said in a statement.

"The decision is aimed at limiting price stability risks," it added.

The ruble slumped near 102 to the dollar on Monday as anxiety around the state of the economy and the impact of Western sanctions weighed heavily on the beleaguered currency.

President Vladimir Putin's economic advisor, Maxim Oreshkin, on Monday blamed the plunging currency and the acceleration of inflation on "loose monetary policy."

The bank last made an emergency rate hike in late February 2022 with a rate raise to 20%.

— Karen Gilchrist

Russia's ruble rises ahead of central bank extraordinary meeting

A woman looks at a board showing the rates of dollars and euros against the ruble in front of the exchange office on February 19, 2023, in Moscow, Russia. Russia's economy is beginning to feel the weight of Western sanctions, following the start of the war against Ukraine. 
Contributor | Getty Images News | Getty Images

The Russian ruble rose on Tuesday ahead of an extraordinary policy meeting called by the central bank to stem the currency's depreciation.

Russia's central bank called the meeting on Monday after the ruble tumbled past 101 per U.S. dollar as anxiety around the state of the economy and the impact of Western sanctions weighed heavy on the beleaguere