Central Bank says it will support stability of hryvnia's foreign exchange rates

The National Bank of Ukraine (NBU) will prop up the stability of the hryvnia's exchange rates, the NBU reported in a statement on its official Web site.

"The NBU will further enhance the stabilization of the hryvnia's forex dynamics through neutralizing drastic fluctuations of its forex rate and reducing general forex risks," reads the statement.

As reported, the hryvnia forex rate on the interbank forex market has remained at the level of about Hr 7.925 per U.S. dollar in the past next weeks against the backdrop of foreign currency purchases by the NBU at a steady rate of Hr 7.925 per U.S. dollar. The forex rate of the hryvnia against the U.S. dollar on the interbank market has strengthened by 0.6% since the beginning of the year, from Hr 7.9750 per U.S. dollar.

According to the NBU, the surplus of its forex interventions since the beginning of 2010 amounted to $1.338 billion as of May 20, 2010, against a deficit estimated at $5.6 billion in the same period of 2009.

"Despite the fact that there was no state borrowing on the foreign markets, and NJSC Naftogaz Ukrainy's payments on its foreign contracts are supported regularly, the NBU January through May increased its international reserves to the equivalent of $26.4 billion, which makes it possible to cover the value of future import of commodities and services for 4.7 months," reads the statement.

The NBU also notes that since the middle of February 2010, the interbank market has been demonstrating clear signs of stabilization - the supply of foreign currency exceeds demand.