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22 August 2017
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Ukraine C.Bank buys dollars at 4.75 hryvnias

Ukraine`s central bank intervened on the interbank market

Ukraine`s central bank intervened on the interbank market on Tuesday, buying dollars at 4.75 hryvnias after announcing it would bid at that level, dealers said, according to Reuters.

The central bank last intervened on July 10, buying dollars at 4.74.

"The central bank came on the market, but bought only in a moderate fashion -- only a part of clients` bids -- 20-30 percent of bank limits," said one dealer.

Dealers said transactions initially took place at 4.6-4.61 to the dollar, but after the central bank indicated its readiness to bid, the hryvnia fell back to 4.65-4.67.

The bank also announced its latest adjustment to the official hryvnia rate, setting it at 4.8401 from Wednesday, July 16. The previous rate, valid from Tuesday, was 4.8413.

The central bank abandoned a three-year-old policy of keeping the hryvnia within a corridor of 5.0-5.06 around February-March and in May revalued the official rate to 4.85 from 5.05. It now adjusts that rate periodically.

Some market participants said a number of clients were willing to sell dollars only to the central bank at the highest possible rate, but sometimes had to wait to process transactions as the bank did not intervene every day.

Dollar supply, in any event, was starting to decline, they said.

"Dollar supply always starts to go down as summer wears on," said one dealer. "You can feel that we are at a specific point on this now. People understand the market won`t go below 4.6."

Last week, a senior central bank official said bank purchases of dollars had pushed reserves up to $36 billion, including $1 billion in the first 10 days of July.

Reuters, Guardian

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