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Ukraine: Central Bank Plans To Support Currency

Kyiv, 21 November 1997 (RFE/RL) - Ukraine's central bank plans to buy large amounts of the country's hryvna currency from foreign banks during the next week in a bid to keep the currency from collapsing.

Western financial analysts say pressure from recent turmoil on the world's financial markets has magnified the fragile state of Ukraine's economy, which is suffering from a slow pace of economic reform. For the past week, the central bank has pumped dollars into Kyiv's forex market and has managed to hold the official exchange rate steady at 1.88 hryvna per dollar. But the hryvna was trading at some commercial banks today at nearly 2 hryvna per dollar -- the second day of trading outside a band the central bank has pledged to maintain until the end of the year.

Foreign banks hold more than $106 million worth of hryvna (at today's official rate) in Ukrainian banks. The central bank's hard currency reserves total about $2.5 billion. Viktor Lysytsky, an aide to Ukrainian National Bank governor Viktor Yushchenko, says the International Monetary Fund has endorsed the plan to prop up the hryvna.