(adds dealers quotes, details)
* Hryvnia dips below 8/$ first time since August
* Central bank buys about $20 million in dollars
* Gas deal, banks capital and election funds boost hryvnia
By Natalya Zinets
KIEV, Nov 26 (Reuters) - Ukraine's central bank bought dollars on Thursday on the interbank market for the first time this year after capital injections, relief over a gas deal and election fund inflows boosted the hryvnia this week.
The bank offered to buy dollars at 7.98 hryvnias and dealers said it purchased about $20 million worth. The hryvnia dipped below the 8.0/$ mark on Thursday to trade at about 7.95-7.98/$ for the first time since mid-August.
The Ukrainian currency has been battered by a deep economic crisis -- a sharp fall in exports and thus dollar revenues, higher gas import prices, foreign loan repayments and political uncertainty have all weighed on the currency in the past year.
The hryvnia lost over half of its value as the crisis hit last year, falling to a historic low of almost 10/$ from a peak of 4.7. Throughout this year it has broadly traded between 7.5-9/$.
"If there is excess liquidity then it needed to be wiped up. The central bank probably bought about $20 million. The dollar was cheaper on the market so for those who needed, they sold up with pleasure," one dealer said.
Dealers said injections of capital into Ukrainian banks from foreign owners helped boost the hryvnia as the banks had to sell those dollars for hryvnias to put on their accounts.
Current account data for October showed an inflow of $673 million of foreign direct investment, of which $482 million went to banks as recapitalisation.
A deal between Moscow and Kiev in which Russia said it would not impose fines worth potentially billions of dollars for Ukraine's under purchase of gas also helped buoy the market.
Monthly gas bills have often put a strain on the hryvnia as state energy firm Naftogaz scrambled for dollars.
Another factor supplying the market with dollars is a presidential election on Jan. 17 as oligarchs dip into cash held abroad to support their choice of a presidential candidate.
"Clearly there are banks, that have a political hue, which are selling the dollar. You need hryvnias to organise elections," another dealer said.
Dealers said because of such factors the hryvnia is likely to remain at its current level until the end of the year, after which it may weaken again.
Since the start of the year, the central bank's interventions had up to now always been to sell the dollar in a bid to stem the hryvnia's weakness.
In January to September the bank carried out a weekly mix of intervention and limited foreign currency auctions. In September, it set up special currency auctions that it carried out twice weekly, aside from auctions meant for the cash market.
After slipping some 15 percent between July-September and hovering close to 9/$, the hryvnia then strengthened and the bank ceased the interbank auctions. (Writing by Sabina Zawadzki; Editing by Ruth Pitchford) ((Kiev bureau; tel: +380 44 244 9150; RM: sabina.zawadzki.reuters.com@reuters.net))