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Ukraine's hryvnia up a touch, cbank sells euros

Published 08/14/2009, 01:09 PM
Updated 08/14/2009, 01:12 PM

KIEV, Aug 14 (Reuters) - Ukraine's hryvnia currency strengthened slightly on Friday to 8.30-8.35 to the dollar from 8.35-8.37 while the central bank sold euros at 11.22 hryvnias at a foreign currency auction, dealers said.

They said they did not see the hryvnia weakening much beyond 8.30 next week, after the national currency dropped over 4 percent this week as the central bank limited its interventions.

"Today trading started sharply up, at 8.37-8.45/$ but then people started selling (the dollar) and trading finished at around 8.30-8.35," one dealer said. The central bank has been either intervening or carrying out dollar auctions on a practically daily basis since the start of the year, when plunging exports due to the global economic crisis took away dollar supply on the interbank market.

In this way the central bank stabilised the hryvnia from almost 10/$ in December, when it lost half of its value to the dollar in four months, to 7.7-7.8 in June and much of July.

But in the past week it has limited its sale of the dollar to banks needing to meet immediate foreign debt obligations leaving many market players unsatisfied.

The central bank normally intervenes on Mondays, Tuesdays and Thursdays and carries out foreign currency auctions on Wednesdays and Fridays. Analysts have said they expected the hryvnia to weaken as banks need to repay a larger amount of foreign currency debt than before and the country continues to suffer a deep recession. (Reporting by Yuri Kulikov; writing by Sabina Zawadzki)

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