Russian officials continue to delay high-level negotiations between Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin amid US calls for a meeting. Kremlin Spokesperson Dmitry Peskov claimed on July 25 that a meeting between Zelensky and Putin remains highly unlikely and stated that Russia and Ukraine must first develop agreements “through expert work.”[1] US President Donald Trump told reporters on July 25 that a meeting between Putin and Zelensky is “going to happen” and that the meeting should have “happened three months ago.”[2] Russian officials have repeatedly postponed high-level meetings between Ukrainian and Russian leaders and refused to engage in constructive negotiations that seek concrete steps to end the war.[3] ISW continues to assess that Russia is feigning interest in negotiations in order to buy time to make gains on the battlefield and extract concessions from Ukraine and the West — in stark contrast to Ukraine’s continued willingness to engage in negotiations to end the war.[4]
Russian forces likely seized Novoekonomichne (northeast of Pokrovsk) and appear to be conducting limited sabotage and reconnaissance missions into Pokrovsk amid ongoing Russian efforts to envelop the town. Geolocated footage published on July 25 indicates that Russian forces recently advanced into central Novoekonomichne and likely seized the settlement.[5] One Kremlin-affiliated milblogger claimed that Ukrainian forces maintain positions near the Kapitalna Mine just west of Novoekonomichne and just south of the mine.[6] A Russian milblogger claimed that Russian forces also advanced further northeast of Pokrovsk near Nykanorivka, Boikivka, and Zatyshok and south of Pokrovsk near Sukhyi Yar and Novoukrainka.[7] Russian milbloggers claimed that elements of the Russian 30th Motorized Rifle Brigade (2nd CAA, Central Military District [CMD]) recently participated in the seizure of Zvirove (southwest of Pokrovsk).[8]Additional Russian milbloggers claimed that Russian infantry units and sabotage and reconnaissance groups advanced into and throughout Pokrovsk and into the outskirts of Myrnohrad (east of Pokrovsk), and one Russian milblogger claimed that several Russian sabotage and reconnaissance groups temporarily advanced into central Pokrovsk.[9] The Kremlin-affiliated milblogger claimed that reports that Russian units are in Pokrovsk are premature, however, and ISW has not observed any indication that Russian forces maintain enduring positions in Pokrovsk.[10] Ukrainian forces are conducting limited counterattacks in the area, and additional geolocated footage published on July 25 indicates that Ukrainian forces recently retook positions west of Hrodivka (east of Pokrovsk).[11]
The Russian military command appears to be leveraging elements of the 51st CAA to advance northeast of Pokrovsk and pressure Ukrainian positions in Pokrovsk and Myrnohrad. The Russian Ministry of Defense (MoD) and Russian milbloggers claimed that the 1st and 3rd battalions of the 5th Motorized Rifle Brigade (51st Combined Arms Army [CAA], formerly 1st Donetsk People’s Republic Army Corps [DNR AC], Southern Military District [SMD]) participated in the seizure of Novoekonomichne.[12] A Ukrainian reserve officer noted that elements of the 51st CAA appear to be the main force attacking northeast and east of Pokrovsk and that these forces maintain sufficient combat capabilities.[13] Elements of the 5th Motorized Rifle Brigade and other elements of the 51st CAA played a significant role in the seizure of Kurakhove in December 2024 and wider Russian advances in western Donetsk in Fall 2024 before redeploying to the area east of Pokrovsk in January and February 2025.[14] Elements of the 5th Motorized Rifle Brigade renewed frontline assaults in May 2025, likely after several months of rest and reconstitution, and have participated in several Russian advances northeast of Pokrovsk in recent months.[15]Ukrainian military observer Kostyantyn Mashovets reported on July 21 that the Russian military command also redeployed elements of the 51st CAA’s 1st and 9th motorized rifle brigades to the area north and northeast of Pokrovsk.[16]
The Russian Central Bank lowered its key interest rate for the second time in two months, likely in an attempt to increase capital available to the Russian defense industrial base (DIB). The Russian Central Bank announced on July 25 that it had lowered its key interest rate from 20 to 18 percent.[29] The Central Bank lowered its annual average key rate forecast to between 18.8 and 19.6 percent in 2025 and between 12 and 13 percent in 2026. The Central Bank also lowered its target annual inflation rate to between 6 and 7 percent for 2025 and four percent for 2026. Central Bank Chairperson Elvira Nabiullina stated on July 25 that the Central Bank chose to lower the key interest rate due to a faster than expected decrease in current inflationary pressures, including a deceleration of inflation, demand, and annual lending growth.[30] Nabiullina also stated that Russia is on its way back to the four percent target inflation rate and that the Central Bank’s ongoing monetary policy efforts are already producing favorable results in the Russian inflation rate.[31] Russian opposition outlet The Bell assessed on July 21 that the Russian Central Bank may choose to lower the key interest rate due to an observed slowing growth rate of the Russian economy, prices, wages, and corporate lending.[32] Growth in these factors would typically exacerbate inflation. The Central Bank may choose to further lower the key interest rate later in 2025. The Central Bank may have lowered its key interest rate as part of the Russian government’s efforts to make more capital available for the Russian DIB and lower the price of borrowing money for DIB producers. The Central Bank has largely leveraged monetary policy to cope with the economic consequences of Russia’s wartime economy and expanded the Russian money supply through military payouts, social projects, and investment in the DIB. Money supply expansion typically exacerbates inflation, and the Central Bank previously introduced a record key interest rate of 21 percent in October 2024 in an attempt to counter inflation due to wartime spending and a weakening ruble.[33] The reduction in the Russian inflation rate may be the result of these efforts, though it remains unclear whether Russian inflation will stabilize.
Key Takeaways:
- Russian officials continue to delay high-level negotiations between Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin amid US calls for a meeting.
- Russian forces likely seized Novoekonomichne (northeast of Pokrovsk) and appear to be conducting limited sabotage and reconnaissance missions into Pokrovsk amid ongoing Russian efforts to envelop the town.
- Russian forces recently advanced into and northwest of Kupyansk.
- The Russian military command could pursue at least three courses of action (COAs) following a future seizure of Kupyansk.
- The Russian Central Bank lowered its key interest rate for the second time in two months, likely in an attempt to increase capital available to the Russian defense industrial base (DIB).
- The Kremlin dismissed First Deputy Director-General of the Kremlin newswire TASS Mikhail Gusman, likely in a continued effort to increase control over domestic media sources affecting Russian-Azerbaijani relations.
- Ukrainian forces recently advanced near Pokrovsk. Russian forces recently advanced near Kupyansk, Toretsk, and Pokrovsk.